The main conclusion is that the US economy is increasingly rewarding the ownership of capital (stocks, companies and assets) against labour, which contributes to the weakening of the middle class and the perception that many households do not fully benefit from economic growth.
Kind of amazing that its a major investment bank that makes obscene profits from capital ownership coming in here and saying things are out of balance.
I recall when the banks became the big employers, when manufacturing started to sputter in America. Everyone was told go to college, be a desk jockey.
Which is what I did. And now, with 15 more years minimum for me until retirement, and already “aged out” of most business models, no clue what we are supposed to do now.
That's the frigtening part. Do everything right, and then poof, it's gone... and not poof early in the career, but mid- to late-career where starting a new career doesn't seem feasible. I know a few late 40s/early 50s people who can't find shit in the economy, not even entry level positions.
Both my brother and a cousin are in this situation. They previously had lucrative careers in engineering, but they both got laid off in recent years, and it turns out that nobody wants to hire senior engineers in their mid-50s. It's been quite the rug-pull.
One of the first lessons I always teach junior engineers is "this isn't a career you retire from, plan accordingly. Learn personal finance and be ready." Or, "when you get an engineering job at a new employer, pay attention to how many retirement parties you see, and what job roles those people have. Then plan accordingly."
Every one of them have told me that that was depressing and morbid.
> One of the first lessons I always teach junior engineers is "this isn't a career you retire from, plan accordingly. Learn personal finance and be ready." Or, "when you get an engineering job at a new employer, pay attention to how many retirement parties you see, and what job roles those people have. Then plan accordingly."
That's not advice. That's you rationalizing an unjust world into a just one. A million factors can blow that whole plan up to the point where the lived experience is indistinguishable from an unplanned one.
Money managers are still being told to inform their clients that everything is fine. When we all know the system is about to change. I’m guilty of it. I’m newly laid off maybe for the better in the big picture. I have or had clients who are in their late 50s early 60s 70/30 long equity trying to retire in the next 3 to 4 years. Yes everything‘s fine. Markets are resilient. Lying through my teeth. The responsible thing to do would be to get them into a fixed annuity send them to MetLife or Corebridge. Even a variable annuity is fine 5% scaled exposure. Nope nope keep them on. Keep them on the wheel. 🤦♂️
Having lived through the ups and downs of the dot com, 2008, and COVID... this time feels A LOT different. It's not a 2008 bubble or a temporary thing. It feels like this is more permanent and long term, and going to hurt a lot of people who took white collar jobs and expected to live their careers in white collar positions.
Yes. The largest difference between now and the other correctional periods you mentioned is we are not inflating out of this. The federal reserve would lower rates in the past to expand credit then once controlling the yield curve was not enough, they actually started counterfeiting money in the wake of 9-11 midst.com bubble also known as quantitative easing. Then broad scale in the fall of 08. Every time we printed out the deficit to have this sense of embedded growth to avert any real economic downturn, we devalued our currency. We also accrued a lot more debt because money is lent into existence. That’s all QE is expanding the M2 supply artificially. Even after all that we were still okay then Covid happened. We injected $8 trillion into the economy without any productivity, backing it that completely destroyed the value of our dollar, more importantly, pricing out the majority market participant that actually keeps the economy running. So now we have to burn it all down. Why can’t it just be solved with a market crash because we are way too overleveraged to have assets deflate in value , the business cycle is dependent on perpetual appreciation to strip equity for new debt issuance there would be an infrastructural collapse so there’s not going to be a crash Nor a boom it’s just going to be a change. We think they’re going to blame it on AI and AI cyber attack of the financial markets when in reality we’re just going back to the gold standard putting the financial markets on holiday.
Strong propensity to believe that we’re aborting the fiat monetary system for a digital currency backed by a basket of commodities. This entails a debt jubilee. Along with a holiday of financial markets. Insurance companies the largest holders of bonds are divesting at a violent rate. Financial workers are getting laid off while markets are at all time highs. Most importantly the Federal reserve is not going to backstop private credits 5 trillion dollar estimated short fall that is due to lenders and investors over the next 18 months.
they know that if they don't voluntarily fix things, it gets real ugly quick for the upper class regardless of your level of technology. The new deal was a radicalism release valve for the US and we need something again
You think the upper class hasn't been anticipating what is coming, and preparing for it? What do you think AI surveillance, new prisons, and an angry and hungry MAGAt population that still believes immigrants are the problem is for?
They've been planning for this intentional hollowing out of the middle class, they're in the process of grabbing all the chips off the table before they flip it over.
Because it’s all ending. They are aware the game is over. If you work in the financial industry you can see it clearly. Are you familiar with private credit?
So can someone explain to me like I'm five. What exactly is ending though?
Inflation of currency and the decrease of purchasing power in the working class merely decreases the control the state and capital has over the population of the country. If there is no incentive for young people to do things for the powers that be they naturally will start doing other things, outside of the scope of law or business.
We have like 80 million people in the US that have been completely fooled that things are going to work out great for them and have built their life around guns. If you bleed them slowly, you get richer and richer, but if you bleed them too quickly, they will blow your head off. Who could have guessed that people that hoard wealth for a living would fall for the tragedy of the commons.
Why not? Buffett says it too. Goldman is smarter than you think. They read history. And they know that whenever inequity gets this high there has always been either a revolution or a global war. Back to Jesus’s time. They don’t want that. We don’t either. Everyone is poorer for a generation.
Here’s a real example. Suppose you were rich and thought Hitler was a great idea and you put your life savings into German stocks?
Guess what. After WW2 those stocks were less than a penny on the dollar.
And what about the poor Germans who didn’t even buy stocks?
Another true real fact. More Germans died after the war than from the war. They were so poor after the war they died. Of starvation and malnutrition disease. 2 million of them.
So yes Goldman knows what will come if we do not fix this soon.
Not yet but will be. The headline of this post is from Goldman Sachs. They still actively invest in a financial society right now. They won’t for long.
Unironically though, the second you suggest things here like reducing labor taxes and increasing capital gains, wealth, inheritance, etc taxes, people flip out.
In the UK, Gary Stevenson’s thing is that assets have increased in value massively since Covid, compared to incomes. This has been supported by government policy which has taxed assets more lightly than incomes.
The effect of this is that wealth inequality increases and small towns tend to die out as wealth moves to large cities.
Gary is doing Gods work. His videos and message can seem repetitive, but some people need to hear things consistently to learn! The root of all our difficulties is rising inequality.
As a recent example, capital collapse vastly outpaced the slowdown in economic growth during the financial crisis.
People being led to assume that simply owning capital is a surefire guarantee of future returns ignores that capital investment carries risks of its own.
It also presents the naive perception that one’s labor holds no value.
For my part, I’m fine with a modest increase in the capital gains tax rate.
Sounds accurate. So, if this is the way we operate going forward, how do young people who own no assets go to college? How do we make purchasing large ticket things like a home or a car possible, without adequate capital or income to make the purchase?
It’s fundamental to how our economy is built. 25 years from now, I’ll likely be dead. But, if I’m not, there will be no market for expensive cars, homes, college tuition, pricey vacations, so on.
Just have parents who have assets already. Live with them, have them gift you assets to bankroll your education. Don't have bootstraps? Too bad. You don't get to be on the ladder.
"Rugged individualism" is turning into "be born rich". Some might tell you it's always been like that.
I’m 51, Gen X. I save now, but my 20’s and some of my 30’s were spent doing the part of dad, earning but heavy childcare costs. Delayed saving for retirement and college for them.
I did have a small student loan, but paid that off in under 10 years. Salary stagnated from 2009-2018, but picked way up from 2018-2023, before dropping back to a lower level.
I’m not sure what to do other than just keep working, keep fighting, keep trying to live by a budget. What else can I do, since being born into wealth or “clairvoyance” aren’t traits of mine?
Yeah I do regularly, but like you I won't be here for it.
To answer your question, people will rent everything from the capital class. just like the good old days of the early 1900s... Think workhouses, abject poverty for 90%, indentured servitude.. all that good stuff.
To fix this problem we will need to tax the capital class more. The people that own the news sites, and the political parties, and your politicians. How do you think that will go ?
I am and it's bleak. The young people are likely going to have to organize and revolt to get what they require. We're trending towards a feudal state. AI likely accelerates that.
There will still be a market but it will only be the capital class that owns. They are not limited to 1 car, 1 house so they will simply buy more than 1 which they already do. The US will develop a caste system similar to India which still has a functioning economy even tho only 40% of the population meaningfully contributes to
Its already gotten to the point where bloodshed is the only thing that will fix this country. And people are not up in arms. We have no organized militia and millions of solo militia thats uncoordinated wont stand a chance against even Title 11 armed police forces yet alone our military. Its just an illusion of a meaningful rebellion not an actual threat to the government.
Also with the utter lack of privacy due to patriot act, any attempt to create a useful militia will be infiltrated by CIA and terminated before it can develop into a credible threat
You don't. You spend every penny trying to have the bare minimum as subscriptions or rentals provided by the people that have the capital, which will bring them more capital. I'm likely similarish age as you and I am glad I bought my last house when I did, 2018. It has increased in value from 175000 to over 400000 since. Fucking crazy is all I can say about that. I could not afford my house today if I hadnt bought when I did.
I wouldn’t say “increasingly” necessarily. Piketty, in his book “Capital in the 21st Century” pretty much demonstrated that this has been going on for a few hundred years at least, certainly since the invention of Capitalism as an official economic policy. The book came out in 2013.
“What's really dishonest is that the small corrections that they make to my series (and with which I disagree) do not make any difference to the overall evolution and to the overall analysis proposed in the book ... and they try to pretend the opposite," he said.
First, the book rests on much more than wealth-inequality figures. Second, the differences in the wealth-inequality figures are, with the exception of Britain, too minor to alter the picture. And third, as Mr Piketty notes in his response, Chapter 10 is not the only analysis of wealth inequality out there, and forthcoming work by other economists (some conclusions of which can be seen here) suggests that Mr Piketty's figures actually understate the true extent of growth in the concentration of wealth.
Sounds like he disputes any meaningful impact to his conclusions. I can’t imagine why someone would want to try and debunk his work ( /s obviously )
Huge surprise that an author disputes having his mistakes/cherry-picking called out.
If you look at measures of social mobility, it has definitely declined. Imagining this to be some inevitable outcome of capitalism is somewhere between useless and disingenuous. Government corruption is a problem for every economic system and, unfortunately, the US's guardrails against it are not robust enough, particularly its reliance on a body with insufficient oversight / checks & balances (the Supreme Court).
I’m not personally attacking Capitalism and that wasn’t my takeaway from Piketty either. What I do think is an issue is the benefits that capital owners get in several ways, such as lower capital gains taxes and regulatory capture through political spending are the two big ones.
Yes, this has been the direct movement for decades. It comes from people whose entire wealth comes from capital ownership (and inheritance of same) buying lawmakers (who are also capital-rich) and demanding laws that do exactly this.
Regular working Americans can complain all they want, but *anyone* they elect will be purchased by the rentier class. The only news here is how much of labor is *actively cheering* for the rentiers.
As said by the creator himself who tried to warn the world how NOT to use it: “The welfare of a nation can scarcely be inferred from a measurement of national income.” .… “Distinctions must be kept in mind between quantity and quality of growth, between its costs and return, and between the short and the long term. Goals for more growth should specify more growth of what and for what.”
At the end of the day, what it really is, is “Gross National COST” the more things that get monetised/marketised = the more things you have which can contribute to GDP. Like how healthcare is a significant contributor to US GDP because you actually have to pay for it.
Yeah uh, that's what happens when you hyper financialize an economy.
We don't MAKE anything in America. We consume stuff made by other countries. They then take our money and pile it straight back in to US assets, making capital owners richer.
This is the main motivation for Trump's tariffs... to disrupt that capital flow.
Unintended side effect? It begins to work and hits US treasuries first.
“We don't MAKE anything in America. We consume stuff made by other countries. They then take our money and pile it straight back in to US assets, making capital owners richer.”
Kinda sounds like “making stuff” doesn’t matter, then.
Certainly to the rest of the world which for some reason takes our money and reinvests it in our economy.
Can we at least trust that everyone else knows what they’re doing by continuing to park their money here?
Idk that we needed this report to know this…. I’m almost certain some room temp IQ folks could have told you that asset ownership is the key to wealth not “labour”. Only poor people work lol
Idk how we decided that rich folks should pay less and not more…
Not sustainable in the long run as workers get discouraged. Unrewarded labor, especially when workers can see the ownership class living in luxury (while doing nothing of value at best or outright raping children and killing without legal repercussions at worst), will result in decreased productivity and social unrest. Who benefits from a society that doesn’t last? This is the problem in centering commerce and society around avarice and brutal self-interested competition.
Oh man, you mean the people who measure things and demand more and more and are good at keeping more and more and know the systems and the levers of power are good at their game? Shocked! (It’s a cash flow issue that rests entirely on fiat creation and the guiding of fiat dollars through a pachinko machine).
This has been in the works for decades, shifting more and more that direction with each decade passing.
This is particularly problematic for the US economy, as the US economy is thoroughly consumption driven, and thus financially weakening households weakens the wider US economy. That's why Goldman Sachs is lowkey panicking.
The rich get richer… that’s always been the case. The erosion of unions and federal safety nets is not helping. We tax labor and not capital, which is why we have such massive federal debt. It’s not great.
Like every financial podcaster of the last however many years has basically said "yeah, I got rich off a house i bought for 42k in 2009, flipped it for 600k in 2020, and started my own business. If you want money you have to own things!" Lol
I’m in high school but this seems obvious, can someone please explain to me how this hasn’t been the case for decades as a result of the way taxes work, income tax vs. capital gains, payroll taxes, the ability to sell and buy at timing you choose to offset taxes, deferrals and carry forwards? Capital just seems like cheat code, labor income is for suckers
Its always been this way but never this pronounced, that is the doing of advanced technology.
People would always do some labor, get paid, and slowly their personal balance sheet is less labor and more capital, this is a simplification but look at boomers for an example.
Now increasingly large labor groups are less valuable due to technology and automation, while capital is just as valuable or more valuable due to it being needed for technology.
It's always been this way we were just heavily propagandized by the American dream and pull yourself up by your bootstrap and rugged individualism rhetoric to promote hypercapitalism and rebrandit as 'meritocrac'. Until this point there was still enough protections that we had a middle class that could buy things but they have destroyed that so much that the middle class is gutted and no one can buy things which cuts into the profits of companies to the point even the capitalists are like, 'wait maybe this was bad...'
Every big drop seems to correlate with tax cuts for the wealthy. I'm sure it's more than that, but you can see it beginning with JFK's cuts in the early 60's.
The government is favoring capital over labor. because capitalists bribe politicians. just add cash and make what was illegal, legal,
This has been going on a long time, picked up during industrial revolution. . it was peak during late 1800s railroads and 20s and robber barons. But clinton got the 90s ball rolling with being a DINO, joinging the GOP, betraying labor and letting china have trade status. that lost millions of jobs/labor, huge corporate profits, created MAGA and trump and a dumpster fire economy.
OK, i skipped ronnie, but he was GOP. corruption and big greed is expected. But Bill did much worse. bring the tiger to our shores and it ate up alot of families.
Yea I'm not interested in giving "expected" corruption and greed a pass. And I'm definitely not interested in whatever revisionist history makes you think he wasn't as bad.
OK. It wuld be interesting. how many people lost jobs with reagan vs clinton. clinton's jobs lost during but mostly after he left office as he opened china late, so he could sneak out. I suspect clinton lost way more jobs than ronnie.
did a quick search
ronnie lost a million? first term was BAD.
clinton during prez lost about a million but while the broader U.S. economy experienced a net gain of over 22 million jobs.
clinton's betrayal china: 2.4 million to 3.8 million jobs LOST since China entered the World Trade Organization in 2001
so, clinton did make a net gain. ronnie net loss. So I was wrong. but this is rough googleing
I still think clinton betrayed the working class. but the economy grew more.
clinton also laid groundwork for the housing crisis, but that harder to quantify $$.
how about you doing that homework. I dont like Ronnie one bit. If you did, you would have to ignore his first term, as that was recovereing from the HUGE recssion of the 70s.
I think clinton is a traitor to his DEM roots and caused alot of damage with china and housing. The neo liberal, who abandons the working class for other choices. Almost all the current DEM leadership is the same as him.
The 1970s saw a huge amount of capex heavy companies rising to the top IBM (mainframes), AT&T (telephone cables), GM (cars), Exxon (oil). These companies required thousands upon thousands of specialised people, building, laying cables, often unionised labour.
This era is very much the tech services asset light software era, Google, Microsoft, Apple (outsourced production), Facebook.
One of the things that has certainly added to this is that Microsoft and Apple can produce their goods in huge factories in China and employ very few US personnel. It means you see many hundreds fantastically paid software or AI guys but not the hundreds of thousands of well paid middle class people.
The era that is coming will probably go further with this trend.
That era may be the cause of MAGA as disaffected midlde class workers rail agaist elites tecchies.
But thats all a diversion to stop you from seeing the real game. capital+corruption+ politicians=profit. been that way a longtime. Trump is acting like the robber barons and railrods, grabbing with both hands. he is just doing it too plain view. corruption grows best in dark places. there are hundreds pulling $$ behind trump.
The thing is eventually the shoe drops and people lose a bunch of money in capital. Of course it rebounds, but it's going to happen and when that happens people who own capital reasonably flip out. The government responds quickly.
The response to labor falling behind is less urgent and also people don't really know what to do.
Yes. But then nobody is happy with that. Everyone has a different idea about how to best address this. However when capital fails everyone knows exactly what to do and there seems to be a consensus.
That's because 100 people have as much wealth as 66 million in the US.
And stupider still, many people don't even see the problem with that!! They're poor and still tell others "you're just jealous you're not rich, get a better job." 🫠
As was designed when we killed pensions and tied American retirement to stocks. Now that they’ve accomplished Regan’s goal of hollowing out the middle class they’re worried?
How is this garbage statement in the economics sub and getting upvoted?
Pensions literally invested in the stock market, retirement has ALWAYS been tied to stocks.
The switch over is just who controls the funds pension fund manager vs you/401(k) manager. Plus the portability of the funds vs those being locked in pension.
Instead of tearing down my comment with this thoughtful insight why not ask, why would OP think that? What is the difference between a pension and a 401k. Because they’re obviously not the same thing, or else we wouldn’t have stopped pensions in favor of 401k’s? And the answer would be the explanation to why the middle class has been hollowed out of their buying power. While corporate wealth and the wage gap has exploded. The answer would be that the liability is on the 401k owner, whereas the pension the liability is in the employer and payments are guaranteed. Because 401k’s allow corporations to continually to issue new stock. This devalues the middle classes retirement investments at the expense of corporate growth.
No thanks, I'll tear down your comment because your comment was intended to sound insightful but was highly ignorant about the inner workings of pensions, and only serves to further people's misunderstanding of pensions.
Now you're doubling-down.
401(k) liability is on the employee? No, it's literally not, it's on the employer still lol
It's why they're highly regulated, audited annually, and release annual reports to participants every year. The only thing you're "liable" about is setting a contribution and picking whatever few investments offered by the fund.
Pension payments are guaranteed? Again, no, they're not. Lol
The only "guarantee" comes from the equivalent of the FDIC for pensions, BUT, it's capped at a specific amount per person. After the cap, you're out of luck.
401(k)'s allow corporations to continually issue new stock...lol what?
No, their Articles of Incorporation allow them to issue new stock. It's completely separate from the 401(k)...you're not even required to offer your company stock inside a 401(k).
This is what I'm talking about, you're throwing out nonsense because you don't know anything about the subject.
You've completely ignored that pension payments typically don't update for inflation meaning your payments today are worth much less in 10 -20 years, pensions aren't portable, and pensions reduce worker mobility.
Maybe next time do some actual research on how pensions function?
Nearly 60% of adults in the US own stock, either individually or via a retirement account. Pensions invest in riskier assets to achieve return obligations due to underfunding.
I dont get why so many people cant grasp this. Even if our 100k turns into 1 million in 25 years, someone’s 100 billion is turning into 1 trillion. Musk’s 800 billion into 8 trillion. There’s no catching up and the gap is just going to keep growing.
Musk’s companies receive 4 million dollars a day in government subsidies. He has the gaul to stand on stage and claim that feeding the American children of immigrant mothers is theft of American labor.
Correct. unfortunately our currency does not have room to weaken any further. Credit expansion at this time is not an option. Working in finance you can see it clearly. After debasing our currency in 2020 in 2021 the goal was to try to get through the boomers under the fiat financial system. We don’t think it’s going to hold. A return to hard money is inevitable. We’re getting laid off in droves here and the markets are at ATH. The largest problem right now is that in private credit we have a $5 trillion hole. A few of the Titans went to the BIS to lobby for help and got shown the door no backstop from the fed. So here I am. You hiring?? 😂😂
Exactly, the article states they own some. Just not enough. The compensation and growth isn’t enough to build a sustainable strong middle class. And I’m tired of CEO’s, investment bankers and hedge managers telling me otherwise. 401k’s give businesses plausible deniability to not provide adequate retirement compensation and then blame the employee for making bad decisions when market growth matched with compensation isn’t enough for retirement.
Well your employer is very generous. The average contribution is 4.6% to 4.8%, with a median of 4%. And with the fed running a 3.4% inflation the matching barely does enough to keep up with the devaluation of the currency alone.
The contribution doesn’t need to increase with inflation because it’s a percent of salary and people receive cost of living increases. That said, wage increases are barely keeping up with inflation since the Iran war started.
I think this is a shallow way to frame the situation. How many people own or are on track to earn enough stock to retire? Many (I would even dare to claim most) individuals choose to invest in riskier assets because they are underfunded.
The median income today is around $50k. I’m not super familiar with the accounting to tell whether it’s better to pay out individuals more or to try to secure their future for them. In any case Im not sure we can claim most Americans are comfortably securing their own retirements.
Do you think pensions invested in riskier assets than equities/stocks is better for retirement? Next you’re going to tell me that Kalshi and sports betting is part of your retirement plan.
If you invested $50/week in the S&P 500 over the past 30 years it would be worth ~$500k today. You would have invested $78k and made $400k+ in returns.
Groceries have gone up what 50% in four years, gas is up 100% from a year ago, rents continue to climb, interest rates just went up, so no…40% is probably too low of a %.
When you think about it, the problem is there are only a few dozen companies driving like half the stock market gains. Even if you expand it to the the SP500, their employees only represents 6% of the population (20 million people). Hell, Nvidia alone employees just 42,000 people and drives almost 10% of the profits generated by the entire stock market. The knowledge work is concentrated in Silicon Valley and all of the production work gets offshored to cheap foreign labor. When you strip out the millions of low level employees at companies like amazon and walmart, the number of well compensated SP500 employees drops much further.
The fact is these tech monopolies that print money are able to increase revenues and profits without increasing headcount through leveraging technology and outsourcing. Apple has maybe 50k high paid jobs in the US and employees millions of people through its supply chain in Asia. The result of monopoly is pricing power, margin expansion, and fewer choices for consumers.
I guess to some degree Google can squeeze employees but I don't think this article is fighting for the Google employee making $450,000 and saying he should be getting a bigger share of profits and making $850,000. That might fix this chart but it does not fix the underlying problem of limited opportunities for jobs people actually want and wealth inequality.
I would postit that it is a result of this terminal phase of the dollar as the global reserve currency. The system breaking is creating all sorts of strange and sometimes counterintuitive effects. Shame that our politicians had neither the foresight nor the will to prevent any of this.
You can clearly see how the rise of globalism in the 80s started to break the system, but the powers that be were too busy swimming in capital gains to notice its effects on the peons.
We knew the leveraged buyout would do us in. Nobody cared it was a license to print money. Now it’s ending. The fed wont backstop the corporations or municipalities. Private equity has been left to rot. The music has stopped.
Yeah, no shit. That's what capitalism does. It rewards capital ownership and sequesters that ownership into a tiny group of people. It's just monarchy again with extra steps.
This is what 50 years of Bork / Chicago school of economics Monopolies are good buy all the judges to make decisions this way does to a country. Trickle down oppression.
Chicago school was pretty forceful about their disagreement of years and years of taxpayer funded bailouts. It took many years of getting to the point we are now and it took a lot of taxpayer bailing out of corporate America to get to the point we are now.
Yep. They’re not going to bail us out. It’s over. Finance will not be a part of the economy. I knew as soon as the leveraged buyout came into play we were in over our skis. Nobody cared though it was a license to print money.
Some wealthy people see what’s coming and realize that their world exists only as long as the masses allow it to. Eventually societal erosion accelerates beyond anyone’s control, and that’s when the really bad stuff starts happening.
It’s over. Nobody has come out publicly and stated it but finance is over. There is going to be some staged, AI cyber attack returning the dollar to a commodity backed dollar
canceling all debt including your mortgage everybody’s debt. The only time in history, the Rich take the hit deflationary deleveraging. The Kings become citizens we had one hell of a run though.
Labor’s falling share doesn’t really have much, if anything, to do with “rewarding capital”
Part of it is the large increase in sole proprietor income, which these statistics capture solely as capital income (even when it’s really not). Part of it is depreciation taking up a larger share of gross GDP over time, which artificially lowers labor’s share (even though it’s partially a reflection of labor productivity). Part of it is that consumer prices have inflated more quickly than output prices. And part of it is the increase in foreign investment, which doesn’t have a labor-equivalent
I mean we have lowered tax rates and created loop holes all to benefit capital. We have spent 50 years making unions harder, undercutting worker power and reducing regulation. So yes it does.
Oh man. If only someone could've seen this coming and articulated methods for the working class to like, idk just spitballing here, seize the means of production or something.
Well, right, Piketty proved this thirteen years ago. A capitalist system will eventually crumble under its own weight unless some amount of wealth is redistributed because return on capital grows faster than economic growth.
So an important issue there isn’t simply that the labor gets a smaller share but it’s who owns the capital capturing the gains a d also with AI that question might become even more important in the future
Been saying this for years, why most people be defending a system that by name has given them no capital. Most people are wage earners, and are servicing debt... Where is the capital? In the hands of the few..
Yep, too many lottery tickets! Pointless working. Wealthy got ridiculously rich. 401 k holders cashing in on a free ride retiring early. I’m worth my carbon imprint. We need a new system in place. We’re being segmented.
Well yeah, the system was designed by Capital for capital. Our great grandfathers resisted and put the oligarchs in their place, but we were too easily distracted by drag queens and trans kids. So here we are
the thing is, it wasn't the drag queens nor the trans kids. it was a failure to recognize propaganda. We're all vulnerable to it and we're all effected by it in today's super connected digital age.
Compounding gains and interest are truly magic, and investing 1 or 2 dollars at a time is certainly better than nothing, but somebody on a median American salary investing numbers that small will never, ever get ahead to the “ownership” class. I would go as far as to say unless you’re maxing a 401k early in your career and investing on the side, the goal posts have moved too far. That is, of course, if we’re talking about “the American Dream” and not simply starving to death.
It's not about getting to the "ownership" class it's about building wealth or at least a cushion and being proactive with your finances.
If someone parked $100 in their bank's savings account earning 0.5% a year, I'd tell them to move it to a HYSA. Sure, it's not going to be a massive amount of money but it's an easy way to get more money with minimal effort.
I'm aware, people don't realize how much better it is today than it was even a decade ago.
When I started out trading I had fees per trade AND had to buy whole shares, no option for fractional shares unless I wanted to invest in an autodraft style investment. Plus, minimal deposit requirements to start an account.
Today, plunking $5 a week or month into an S&P 500 or similar index fund when you get your first job is simple.
This will change very soon. We’re moving to a new currency. I’m not sure if finance will be involved in the western world’s new system. I’ve spoken with a few folks and came up with a thesis. The only way out from here is to have a global debt jubilee coupled with a pinning of the dollar to a basket of commodities. Possibly a digital currency that is decentralized from the federal reserve and IRS. We simply can’t inflate through this credit cycle. We could…. Yet tons of wealthy individuals would be subject to extreme violence from their own law-enforcement and military personnel along with ordinary citizens. There is a codependency between worker and wealthy. You can’t just have a few thousand people accruing all the wealth. Their money becomes useless because there’s no market economy to use it in. When they shut down the stock market and the lights go out don’t panic. It’s all planned out.
The reason is because big tech companies can scale up revenue quickly, tend not to have/need much competition, and tend to have quite low costs comparatively. That being said, things are obviously improving for the average person even if the share is declining
> That being said, things are obviously improving for the average person even if the share is declining
I think the jury is still out on this, at least in the micro. For instance while life expectancy reaches record highs, birth rates are falling precipitously.
Houses are much larger, safer, and more comfortable than they were 50 years ago, but the home-price to income ratio is at record highs, making it much harder to get one.
Would raising salaries reduce company profits, and how might that affect the distribution of wealth and the value of existing assets?
Could higher wages contribute to rebuilding the middle class, and what other factors would influence that outcome?
Alternatively, would increasing corporate taxes be an effective way to address the deficit?
What potential benefits and trade-offs should Congress consider when evaluating these approaches?
[OP] Sufficient_Fuel5269 | 12 hours ago
The main conclusion is that the US economy is increasingly rewarding the ownership of capital (stocks, companies and assets) against labour, which contributes to the weakening of the middle class and the perception that many households do not fully benefit from economic growth.
pluralofjackinthebox | 12 hours ago
Kind of amazing that its a major investment bank that makes obscene profits from capital ownership coming in here and saying things are out of balance.
082426grateful | 12 hours ago
I recall when the banks became the big employers, when manufacturing started to sputter in America. Everyone was told go to college, be a desk jockey.
Which is what I did. And now, with 15 more years minimum for me until retirement, and already “aged out” of most business models, no clue what we are supposed to do now.
hereditydrift | 11 hours ago
That's the frigtening part. Do everything right, and then poof, it's gone... and not poof early in the career, but mid- to late-career where starting a new career doesn't seem feasible. I know a few late 40s/early 50s people who can't find shit in the economy, not even entry level positions.
serpentjaguar | 11 hours ago
Both my brother and a cousin are in this situation. They previously had lucrative careers in engineering, but they both got laid off in recent years, and it turns out that nobody wants to hire senior engineers in their mid-50s. It's been quite the rug-pull.
dogs_gt_cats | 11 hours ago
One of the first lessons I always teach junior engineers is "this isn't a career you retire from, plan accordingly. Learn personal finance and be ready." Or, "when you get an engineering job at a new employer, pay attention to how many retirement parties you see, and what job roles those people have. Then plan accordingly."
Every one of them have told me that that was depressing and morbid.
More than half were laid off within 2 years.
PMmeuroneweirdtrick | 8 hours ago
This will be most office professions soon if not already
clickhereifuraloser | 5 hours ago
> One of the first lessons I always teach junior engineers is "this isn't a career you retire from, plan accordingly. Learn personal finance and be ready." Or, "when you get an engineering job at a new employer, pay attention to how many retirement parties you see, and what job roles those people have. Then plan accordingly."
That's not advice. That's you rationalizing an unjust world into a just one. A million factors can blow that whole plan up to the point where the lived experience is indistinguishable from an unplanned one.
Prestigious_Load1699 | 53 minutes ago
I mean, according to the following source unemployment for senior engineers is like 1.1%.
Perhaps it depends on the specific field, but the data suggest experienced workers in technical fields are in super-high demand.
https://ycharts.com/indicators/us_unemployment_rate_experienced_as_architecture_and_engineering_occupations_unadjusted
Mbstranche08 | 10 hours ago
Money managers are still being told to inform their clients that everything is fine. When we all know the system is about to change. I’m guilty of it. I’m newly laid off maybe for the better in the big picture. I have or had clients who are in their late 50s early 60s 70/30 long equity trying to retire in the next 3 to 4 years. Yes everything‘s fine. Markets are resilient. Lying through my teeth. The responsible thing to do would be to get them into a fixed annuity send them to MetLife or Corebridge. Even a variable annuity is fine 5% scaled exposure. Nope nope keep them on. Keep them on the wheel. 🤦♂️
hereditydrift | 9 hours ago
Having lived through the ups and downs of the dot com, 2008, and COVID... this time feels A LOT different. It's not a 2008 bubble or a temporary thing. It feels like this is more permanent and long term, and going to hurt a lot of people who took white collar jobs and expected to live their careers in white collar positions.
Maxpowr9 | 5 hours ago
The irony is, consulting companies like Goldman, are primed to be replaced by AI.
ButtStuffingt0n | 2 hours ago
Well, Goldman's actually like 4 different kinds of "bank" and a giant wealth advisor to the ultra rich so they will be beneficiaries of this.
Mbstranche08 | 8 hours ago
Yes. The largest difference between now and the other correctional periods you mentioned is we are not inflating out of this. The federal reserve would lower rates in the past to expand credit then once controlling the yield curve was not enough, they actually started counterfeiting money in the wake of 9-11 midst.com bubble also known as quantitative easing. Then broad scale in the fall of 08. Every time we printed out the deficit to have this sense of embedded growth to avert any real economic downturn, we devalued our currency. We also accrued a lot more debt because money is lent into existence. That’s all QE is expanding the M2 supply artificially. Even after all that we were still okay then Covid happened. We injected $8 trillion into the economy without any productivity, backing it that completely destroyed the value of our dollar, more importantly, pricing out the majority market participant that actually keeps the economy running. So now we have to burn it all down. Why can’t it just be solved with a market crash because we are way too overleveraged to have assets deflate in value , the business cycle is dependent on perpetual appreciation to strip equity for new debt issuance there would be an infrastructural collapse so there’s not going to be a crash Nor a boom it’s just going to be a change. We think they’re going to blame it on AI and AI cyber attack of the financial markets when in reality we’re just going back to the gold standard putting the financial markets on holiday.
more_business_juice_ | 7 hours ago
How is the system about to change?
Mbstranche08 | 5 hours ago
Strong propensity to believe that we’re aborting the fiat monetary system for a digital currency backed by a basket of commodities. This entails a debt jubilee. Along with a holiday of financial markets. Insurance companies the largest holders of bonds are divesting at a violent rate. Financial workers are getting laid off while markets are at all time highs. Most importantly the Federal reserve is not going to backstop private credits 5 trillion dollar estimated short fall that is due to lenders and investors over the next 18 months.
more_business_juice_ | 5 hours ago
What does a regular person do?
Mbstranche08 | 5 hours ago
We will all find out soon enough. It better not be some communist gig where we must follow rules to receive tokens.
ButtStuffingt0n | 2 hours ago
Would that be vastly different than the median US worker's life under "capitalism" (if you can still call this jerry-rigged casino that)?
paladin10025 | 7 hours ago
Ah the revenge of the IUL!
Mbstranche08 | 5 hours ago
That’s where it’s all going. Insurance. With the exception of 12 companies that represent 42% of the SP 500 value. It’s a dumpster fire.
paladin10025 | 5 hours ago
I work with L&A carriers and its all about RILA's.
NextGen-Panic | 9 hours ago
Starve to death while watching your kids die of thirst?
Or start learning French carpentry.
After all, lumber is down to the lowest price of the year.
And Halloween's around the corner, so we'll all be wearing masks.
Prestigious_Load1699 | 56 minutes ago
Ironically, someone like yourself with education and decades of experience is considered much more hireable than a kid fresh out of college.
You don’t need to be trained - which appears to be the major barrier of entry right now.
rooftopgoblin | 9 hours ago
they know that if they don't voluntarily fix things, it gets real ugly quick for the upper class regardless of your level of technology. The new deal was a radicalism release valve for the US and we need something again
oldirtyrestaurant | 8 hours ago
You think the upper class hasn't been anticipating what is coming, and preparing for it? What do you think AI surveillance, new prisons, and an angry and hungry MAGAt population that still believes immigrants are the problem is for?
They've been planning for this intentional hollowing out of the middle class, they're in the process of grabbing all the chips off the table before they flip it over.
rooftopgoblin | 7 hours ago
unless they plan to staff their bunkers with robots eventually it will find them
oldirtyrestaurant | 6 hours ago
...that's exactly what they're planning on doing.
Mbstranche08 | 11 hours ago
Because it’s all ending. They are aware the game is over. If you work in the financial industry you can see it clearly. Are you familiar with private credit?
Comeino | 2 hours ago
So can someone explain to me like I'm five. What exactly is ending though?
Inflation of currency and the decrease of purchasing power in the working class merely decreases the control the state and capital has over the population of the country. If there is no incentive for young people to do things for the powers that be they naturally will start doing other things, outside of the scope of law or business.
So what exactly do you think is happening?
Prestigious_Load1699 | 51 minutes ago
It’s just bog-standard Reddit doomerism, my friend.
Disregard and move on.
arstin | 4 hours ago
We have like 80 million people in the US that have been completely fooled that things are going to work out great for them and have built their life around guns. If you bleed them slowly, you get richer and richer, but if you bleed them too quickly, they will blow your head off. Who could have guessed that people that hoard wealth for a living would fall for the tragedy of the commons.
Any_Sale2030 | 10 hours ago
Why not? Buffett says it too. Goldman is smarter than you think. They read history. And they know that whenever inequity gets this high there has always been either a revolution or a global war. Back to Jesus’s time. They don’t want that. We don’t either. Everyone is poorer for a generation.
Here’s a real example. Suppose you were rich and thought Hitler was a great idea and you put your life savings into German stocks?
Guess what. After WW2 those stocks were less than a penny on the dollar.
And what about the poor Germans who didn’t even buy stocks?
Another true real fact. More Germans died after the war than from the war. They were so poor after the war they died. Of starvation and malnutrition disease. 2 million of them.
So yes Goldman knows what will come if we do not fix this soon.
ChiefWiggum101 | 9 hours ago
The phrase “eat the rich” may become literal.
TheDancingOctopus | 9 hours ago
Your numbers don’t seem to add up:
German losses during ww2 are usually estimated between 4.5 - 5.5 million.
German excess deaths after ww2 are usually estimated 300k - 800k
Where did you get your numbers?
Worth-Lead-5944 | 39 minutes ago
After the war is a 81 year period to be fair.
Iron-Fist | 12 hours ago
Obviously need a capital gains holiday
Mbstranche08 | 11 hours ago
Yes. I truly have reason to believe finance will be detached from our economy soon.
-Accession- | 11 hours ago
It’s already long gone
Mbstranche08 | 11 hours ago
Not yet but will be. The headline of this post is from Goldman Sachs. They still actively invest in a financial society right now. They won’t for long.
_BearHawk | 6 hours ago
Unironically though, the second you suggest things here like reducing labor taxes and increasing capital gains, wealth, inheritance, etc taxes, people flip out.
Iron-Fist | 5 hours ago
"people" as represented by the media and algorithms controlled by the people who most of the capital with gains?
Tammer_Stern | 12 hours ago
In the UK, Gary Stevenson’s thing is that assets have increased in value massively since Covid, compared to incomes. This has been supported by government policy which has taxed assets more lightly than incomes.
The effect of this is that wealth inequality increases and small towns tend to die out as wealth moves to large cities.
GeorgeClewney | 7 hours ago
Gary is doing Gods work. His videos and message can seem repetitive, but some people need to hear things consistently to learn! The root of all our difficulties is rising inequality.
Thom0 | an hour ago
Gary himself is using Piketty's work which is the origin of this conversation.
R > G proves right again.
Prestigious_Load1699 | 43 minutes ago
R > G is not always true.
From the post-war period of 1945 to 1980 it was inverted.
That said, it almost certainly seems to be the new norm in the globalized, tech-heavy economy we have lived in for the past four-plus decades.
Just providing some historical context.
Thom0 | 36 minutes ago
But this is obvious? This was also exactly what Thomas Picketty's Capital in the 21st Century is about. It's even in the title.
Pre-1970's and post-1970's are two different worlds and this is pretty much what Picketty's entire books is about.
I genuinely believe that more have an opinion on R > G than people who have read the book.
Prestigious_Load1699 | 15 minutes ago
I don’t disagree with you or Piketty.
I’m just trying to expand the conversation a bit.
As a recent example, capital collapse vastly outpaced the slowdown in economic growth during the financial crisis.
People being led to assume that simply owning capital is a surefire guarantee of future returns ignores that capital investment carries risks of its own.
It also presents the naive perception that one’s labor holds no value.
For my part, I’m fine with a modest increase in the capital gains tax rate.
082426grateful | 12 hours ago
Sounds accurate. So, if this is the way we operate going forward, how do young people who own no assets go to college? How do we make purchasing large ticket things like a home or a car possible, without adequate capital or income to make the purchase?
It’s fundamental to how our economy is built. 25 years from now, I’ll likely be dead. But, if I’m not, there will be no market for expensive cars, homes, college tuition, pricey vacations, so on.
Anyone thinking that far out, or just me?
woah_man | 12 hours ago
Just have parents who have assets already. Live with them, have them gift you assets to bankroll your education. Don't have bootstraps? Too bad. You don't get to be on the ladder.
"Rugged individualism" is turning into "be born rich". Some might tell you it's always been like that.
chance-- | 12 hours ago
There were definitely more avenues to carve your own path decades ago.
My math professor in college would work as a roofer through the summer to pay for his tuition, housing, and all other expenses through the year.
I have tens of thousands in debt and I worked almost full time while in college. I do not know what kids will do going forward but it ain’t great.
082426grateful | 11 hours ago
I’m 51, Gen X. I save now, but my 20’s and some of my 30’s were spent doing the part of dad, earning but heavy childcare costs. Delayed saving for retirement and college for them.
I did have a small student loan, but paid that off in under 10 years. Salary stagnated from 2009-2018, but picked way up from 2018-2023, before dropping back to a lower level.
I’m not sure what to do other than just keep working, keep fighting, keep trying to live by a budget. What else can I do, since being born into wealth or “clairvoyance” aren’t traits of mine?
tmmzc85 | 11 hours ago
It's me, I am some.
Snors | 11 hours ago
Yeah I do regularly, but like you I won't be here for it.
To answer your question, people will rent everything from the capital class. just like the good old days of the early 1900s... Think workhouses, abject poverty for 90%, indentured servitude.. all that good stuff.
To fix this problem we will need to tax the capital class more. The people that own the news sites, and the political parties, and your politicians. How do you think that will go ?
ChiefWiggum101 | 9 hours ago
You are right. We are more likely to cut taxes on the wealthy and deregulate, than we are at actually fixing the problem.
Dutch1206 | 12 hours ago
I am and it's bleak. The young people are likely going to have to organize and revolt to get what they require. We're trending towards a feudal state. AI likely accelerates that.
oldirtyrestaurant | 7 hours ago
Capital has been planning on that acceleration, and anticipating revolt. They're readying themselves.
Dutch1206 | 6 hours ago
Oh 100%. Bunkers and/or the “Freedom Cities”.
stocks-sportbikes | 11 hours ago
There will still be a market but it will only be the capital class that owns. They are not limited to 1 car, 1 house so they will simply buy more than 1 which they already do. The US will develop a caste system similar to India which still has a functioning economy even tho only 40% of the population meaningfully contributes to
Mbstranche08 | 11 hours ago
Nobody is armed in India. It would be a generational bloodbath in America
emp-sup-bry | 10 hours ago
It’s already been this way for most of us.
The gun owners are all talk. As long as they can put their ram truck on 7 year payment, they think they made it in this country.
Mbstranche08 | 10 hours ago
😂😂😂😂🤦♂️ I hear you.
stocks-sportbikes | 11 hours ago
Its already gotten to the point where bloodshed is the only thing that will fix this country. And people are not up in arms. We have no organized militia and millions of solo militia thats uncoordinated wont stand a chance against even Title 11 armed police forces yet alone our military. Its just an illusion of a meaningful rebellion not an actual threat to the government.
Also with the utter lack of privacy due to patriot act, any attempt to create a useful militia will be infiltrated by CIA and terminated before it can develop into a credible threat
Mbstranche08 | 11 hours ago
In that case I wish the capital class and there children best of luck 🙏
ChiefWiggum101 | 9 hours ago
The French had a way to deal with this…
JoJackthewonderskunk | 12 hours ago
Is that before next quarter? Then no
klingma | 8 hours ago
Loans, like they're doing now?
Or better yet go to junior college where it's far cheaper and many states are making it free?
Or work for an employer that does tuition reimbursement?
Down payment assistance programs exist for housing.
None of that's perfect but it's also not nearly as bleak as you're making it out to be.
ooooogirlshedonealre | 5 hours ago
You don't. You spend every penny trying to have the bare minimum as subscriptions or rentals provided by the people that have the capital, which will bring them more capital. I'm likely similarish age as you and I am glad I bought my last house when I did, 2018. It has increased in value from 175000 to over 400000 since. Fucking crazy is all I can say about that. I could not afford my house today if I hadnt bought when I did.
Ateist | 4 hours ago
> how do young people who own no assets go to college?
Replace them with online courses and books?
Lots of educational things are available for free nowdays.
Only colleges that offer lots of practical courses are irreplaceable.
kaplanfx | 12 hours ago
I wouldn’t say “increasingly” necessarily. Piketty, in his book “Capital in the 21st Century” pretty much demonstrated that this has been going on for a few hundred years at least, certainly since the invention of Capitalism as an official economic policy. The book came out in 2013.
Electrical-Box-4845 | 11 hours ago
Many good data on this book. Till 70s US had something like 90% tax for rich and UK almost 100%
Also he has courage dennouncing Economy as science. Not all economists do it
ImNotHere2023 | 11 hours ago
There were numerous flaws in his analysis, so I'd heavily discount the claim that this has always been the case... this is one of many critiques.
https://www.bbc.com/news/blogs-echochambers-27612531
kaplanfx | 11 hours ago
“What's really dishonest is that the small corrections that they make to my series (and with which I disagree) do not make any difference to the overall evolution and to the overall analysis proposed in the book ... and they try to pretend the opposite," he said.
First, the book rests on much more than wealth-inequality figures. Second, the differences in the wealth-inequality figures are, with the exception of Britain, too minor to alter the picture. And third, as Mr Piketty notes in his response, Chapter 10 is not the only analysis of wealth inequality out there, and forthcoming work by other economists (some conclusions of which can be seen here) suggests that Mr Piketty's figures actually understate the true extent of growth in the concentration of wealth.
Sounds like he disputes any meaningful impact to his conclusions. I can’t imagine why someone would want to try and debunk his work ( /s obviously )
ImNotHere2023 | 11 hours ago
Huge surprise that an author disputes having his mistakes/cherry-picking called out.
If you look at measures of social mobility, it has definitely declined. Imagining this to be some inevitable outcome of capitalism is somewhere between useless and disingenuous. Government corruption is a problem for every economic system and, unfortunately, the US's guardrails against it are not robust enough, particularly its reliance on a body with insufficient oversight / checks & balances (the Supreme Court).
https://news.yale.edu/2025/02/20/tracking-decline-social-mobility-us-and-how-reverse-trend#:~:text=U.S.%20decline,1980s%20cohort%3B
kaplanfx | 11 hours ago
I’m not personally attacking Capitalism and that wasn’t my takeaway from Piketty either. What I do think is an issue is the benefits that capital owners get in several ways, such as lower capital gains taxes and regulatory capture through political spending are the two big ones.
CapillaryClinton | 11 hours ago
Personally I thought it was quite a sensible and fair response.
ActualSpiders | 11 hours ago
Yes, this has been the direct movement for decades. It comes from people whose entire wealth comes from capital ownership (and inheritance of same) buying lawmakers (who are also capital-rich) and demanding laws that do exactly this.
Regular working Americans can complain all they want, but *anyone* they elect will be purchased by the rentier class. The only news here is how much of labor is *actively cheering* for the rentiers.
UnknownBreadd | 12 hours ago
Almost like GDP is inherently flawed!
As said by the creator himself who tried to warn the world how NOT to use it: “The welfare of a nation can scarcely be inferred from a measurement of national income.” .… “Distinctions must be kept in mind between quantity and quality of growth, between its costs and return, and between the short and the long term. Goals for more growth should specify more growth of what and for what.”
At the end of the day, what it really is, is “Gross National COST” the more things that get monetised/marketised = the more things you have which can contribute to GDP. Like how healthcare is a significant contributor to US GDP because you actually have to pay for it.
Prestigious_Load1699 | 39 minutes ago
Everything is monetized, strictly speaking.
A single-payer healthcare system still counts toward GDP.
Though your point is well taken. Not everything in life can be reduced to mere numbers.
MobilePenguins | 10 hours ago
They wonder why young people favor socialism, without admitting that capitalism isn’t working for them.
Prestigious_Load1699 | 38 minutes ago
Does wealth even grow in a Socialist economy?
Can we ask Venezuela or Cuba for input?
ButtStuffingt0n | 10 hours ago
Yeah uh, that's what happens when you hyper financialize an economy.
We don't MAKE anything in America. We consume stuff made by other countries. They then take our money and pile it straight back in to US assets, making capital owners richer.
This is the main motivation for Trump's tariffs... to disrupt that capital flow.
Unintended side effect? It begins to work and hits US treasuries first.
Next up... Equities.
Prestigious_Load1699 | 33 minutes ago
“We don't MAKE anything in America. We consume stuff made by other countries. They then take our money and pile it straight back in to US assets, making capital owners richer.”
Kinda sounds like “making stuff” doesn’t matter, then.
Certainly to the rest of the world which for some reason takes our money and reinvests it in our economy.
Can we at least trust that everyone else knows what they’re doing by continuing to park their money here?
chankhuncha | 12 hours ago
R>G
nogonigo | 10 hours ago
Idk that we needed this report to know this…. I’m almost certain some room temp IQ folks could have told you that asset ownership is the key to wealth not “labour”. Only poor people work lol
Idk how we decided that rich folks should pay less and not more…
rhetoricalimperative | 9 hours ago
That was Thomas Piketty's thesis in his 2013 book
brotherhyrum | 6 hours ago
Not sustainable in the long run as workers get discouraged. Unrewarded labor, especially when workers can see the ownership class living in luxury (while doing nothing of value at best or outright raping children and killing without legal repercussions at worst), will result in decreased productivity and social unrest. Who benefits from a society that doesn’t last? This is the problem in centering commerce and society around avarice and brutal self-interested competition.
Lunarisation | 8 hours ago
That’s literally what capitalism means. It’s even in the first 7 letters of the word.
humanreporting4duty | 4 hours ago
Oh man, you mean the people who measure things and demand more and more and are good at keeping more and more and know the systems and the levers of power are good at their game? Shocked! (It’s a cash flow issue that rests entirely on fiat creation and the guiding of fiat dollars through a pachinko machine).
FreddyJetson | 12 hours ago
Here’s some corporate law for ya to look up.
Ford v Dodge, Detroit 1919
Adventurous-Roof488 | 12 hours ago
“Perception” is the key word that most people will miss in this.
Low-Act7169 | 10 hours ago
This has been in the works for decades, shifting more and more that direction with each decade passing.
This is particularly problematic for the US economy, as the US economy is thoroughly consumption driven, and thus financially weakening households weakens the wider US economy. That's why Goldman Sachs is lowkey panicking.
Mbstranche08 | 8 hours ago
100% not low key. The entire financial industry is panicking right now. We’re told to say all is well. Markets are resilient.
Low-Act7169 | 7 hours ago
Fair; what is more precisely my point is that Goldman Sachs is lowkey openly panicking; the above article makes that clear.
Rupperrt | 5 hours ago
Goldman Sachs doesn’t require assets to go up to make money so I doubt they’re panicking.
They make money in either direction.
Mbstranche08 | 5 hours ago
Shorts require liquidity the central bank is no longer willing to provide. Big changes.
Mbstranche08 | 5 hours ago
Yes in a system where dollars are still relevant I agree.
sassyscorpionqueen | 9 hours ago
This. 💯
Low-Act7169 | 7 hours ago
Thank you.
Sufficient_Fig_4887 | 11 hours ago
The rich get richer… that’s always been the case. The erosion of unions and federal safety nets is not helping. We tax labor and not capital, which is why we have such massive federal debt. It’s not great.
Alcoholic_Satan | 11 hours ago
Like every financial podcaster of the last however many years has basically said "yeah, I got rich off a house i bought for 42k in 2009, flipped it for 600k in 2020, and started my own business. If you want money you have to own things!" Lol
Pararistolochia | 9 hours ago
I’m in high school but this seems obvious, can someone please explain to me how this hasn’t been the case for decades as a result of the way taxes work, income tax vs. capital gains, payroll taxes, the ability to sell and buy at timing you choose to offset taxes, deferrals and carry forwards? Capital just seems like cheat code, labor income is for suckers
growaway9172 | 8 hours ago
Its always been this way but never this pronounced, that is the doing of advanced technology.
People would always do some labor, get paid, and slowly their personal balance sheet is less labor and more capital, this is a simplification but look at boomers for an example.
Now increasingly large labor groups are less valuable due to technology and automation, while capital is just as valuable or more valuable due to it being needed for technology.
Prestigious_Load1699 | 27 minutes ago
Do you think that offsetting taxes and carry forwards exist in a vacuum?
Eventually, the bill comes due.
Simply having capital is no guarantee of future returns.
M00n_Slippers | 3 hours ago
It's always been this way we were just heavily propagandized by the American dream and pull yourself up by your bootstrap and rugged individualism rhetoric to promote hypercapitalism and rebrandit as 'meritocrac'. Until this point there was still enough protections that we had a middle class that could buy things but they have destroyed that so much that the middle class is gutted and no one can buy things which cuts into the profits of companies to the point even the capitalists are like, 'wait maybe this was bad...'
rogun64 | 10 hours ago
Every big drop seems to correlate with tax cuts for the wealthy. I'm sure it's more than that, but you can see it beginning with JFK's cuts in the early 60's.
aquavelva23 | 12 hours ago
The government is favoring capital over labor. because capitalists bribe politicians. just add cash and make what was illegal, legal,
This has been going on a long time, picked up during industrial revolution. . it was peak during late 1800s railroads and 20s and robber barons. But clinton got the 90s ball rolling with being a DINO, joinging the GOP, betraying labor and letting china have trade status. that lost millions of jobs/labor, huge corporate profits, created MAGA and trump and a dumpster fire economy.
corinini | 11 hours ago
Holy Reaganomics erasure.
aquavelva23 | 11 hours ago
OK, i skipped ronnie, but he was GOP. corruption and big greed is expected. But Bill did much worse. bring the tiger to our shores and it ate up alot of families.
corinini | 11 hours ago
Yea I'm not interested in giving "expected" corruption and greed a pass. And I'm definitely not interested in whatever revisionist history makes you think he wasn't as bad.
aquavelva23 | 10 hours ago
OK. It wuld be interesting. how many people lost jobs with reagan vs clinton. clinton's jobs lost during but mostly after he left office as he opened china late, so he could sneak out. I suspect clinton lost way more jobs than ronnie.
did a quick search
ronnie lost a million? first term was BAD.
clinton during prez lost about a million but while the broader U.S. economy experienced a net gain of over 22 million jobs.
clinton's betrayal china: 2.4 million to 3.8 million jobs LOST since China entered the World Trade Organization in 2001
so, clinton did make a net gain. ronnie net loss. So I was wrong. but this is rough googleing
I still think clinton betrayed the working class. but the economy grew more.
clinton also laid groundwork for the housing crisis, but that harder to quantify $$.
corinini | 10 hours ago
Now do % of people living in poverty, unemployment rate, jobs lost as a percentage of the total population, and union membership decline.
Reagan was an unmitigated disaster for the decline of the middle class, all while blowing up the national debt.
aquavelva23 | 10 hours ago
how about you doing that homework. I dont like Ronnie one bit. If you did, you would have to ignore his first term, as that was recovereing from the HUGE recssion of the 70s.
I think clinton is a traitor to his DEM roots and caused alot of damage with china and housing. The neo liberal, who abandons the working class for other choices. Almost all the current DEM leadership is the same as him.
corinini | 10 hours ago
I've already done that homework which is why I said what I said.
I'm not ignoring anything - I'm looking at where he started AND where he ended.
aquavelva23 | 10 hours ago
your choice. the effect of any major presidential economic action takes at least 2 years. but why argue about how bad ronnie was? lol.
corinini | 10 hours ago
Good thing they were both president for 8 years so we have plenty of relevant information to go by.
cool-sheep | 12 hours ago
I think it’s more of an era thing.
The 1970s saw a huge amount of capex heavy companies rising to the top IBM (mainframes), AT&T (telephone cables), GM (cars), Exxon (oil). These companies required thousands upon thousands of specialised people, building, laying cables, often unionised labour.
This era is very much the tech services asset light software era, Google, Microsoft, Apple (outsourced production), Facebook.
One of the things that has certainly added to this is that Microsoft and Apple can produce their goods in huge factories in China and employ very few US personnel. It means you see many hundreds fantastically paid software or AI guys but not the hundreds of thousands of well paid middle class people.
The era that is coming will probably go further with this trend.
-xXpurplypunkXx- | 12 hours ago
Maybe there should be a categorization of type of capital? IP, hardware etc.
aquavelva23 | 11 hours ago
That era may be the cause of MAGA as disaffected midlde class workers rail agaist elites tecchies.
But thats all a diversion to stop you from seeing the real game. capital+corruption+ politicians=profit. been that way a longtime. Trump is acting like the robber barons and railrods, grabbing with both hands. he is just doing it too plain view. corruption grows best in dark places. there are hundreds pulling $$ behind trump.
Dangerous_Finance_38 | 11 hours ago
Are Chinese not people?
gimpwiz | 12 hours ago
This is a buzzword salad. What an absurd comment.
Prestigious_Load1699 | 11 minutes ago
Hehe yeah…
It’s reductionist gibberish.
aquavelva23 | 11 hours ago
I guess you think clinton was great. Now thats a different type of salad. I am sure bill like his tossed. if hillary wasnt around
phedinhinleninpark | 3 hours ago
Bank: describes capitalism
Liberals: 🫢
thebigmanhastherock | 11 hours ago
The thing is eventually the shoe drops and people lose a bunch of money in capital. Of course it rebounds, but it's going to happen and when that happens people who own capital reasonably flip out. The government responds quickly.
The response to labor falling behind is less urgent and also people don't really know what to do.
aRawPancake | 6 hours ago
Pay people more, or, tax at higher rates to pay down debt or fix infrastructure or something like that
thebigmanhastherock | 6 hours ago
Yes. But then nobody is happy with that. Everyone has a different idea about how to best address this. However when capital fails everyone knows exactly what to do and there seems to be a consensus.
Defiant_Freedom_249 | 7 hours ago
That's because 100 people have as much wealth as 66 million in the US.
And stupider still, many people don't even see the problem with that!! They're poor and still tell others "you're just jealous you're not rich, get a better job." 🫠
McCool303 | 12 hours ago
As was designed when we killed pensions and tied American retirement to stocks. Now that they’ve accomplished Regan’s goal of hollowing out the middle class they’re worried?
klingma | 8 hours ago
How is this garbage statement in the economics sub and getting upvoted?
Pensions literally invested in the stock market, retirement has ALWAYS been tied to stocks.
The switch over is just who controls the funds pension fund manager vs you/401(k) manager. Plus the portability of the funds vs those being locked in pension.
McCool303 | 4 hours ago
Instead of tearing down my comment with this thoughtful insight why not ask, why would OP think that? What is the difference between a pension and a 401k. Because they’re obviously not the same thing, or else we wouldn’t have stopped pensions in favor of 401k’s? And the answer would be the explanation to why the middle class has been hollowed out of their buying power. While corporate wealth and the wage gap has exploded. The answer would be that the liability is on the 401k owner, whereas the pension the liability is in the employer and payments are guaranteed. Because 401k’s allow corporations to continually to issue new stock. This devalues the middle classes retirement investments at the expense of corporate growth.
klingma | an hour ago
No thanks, I'll tear down your comment because your comment was intended to sound insightful but was highly ignorant about the inner workings of pensions, and only serves to further people's misunderstanding of pensions.
Now you're doubling-down.
401(k) liability is on the employee? No, it's literally not, it's on the employer still lol
It's why they're highly regulated, audited annually, and release annual reports to participants every year. The only thing you're "liable" about is setting a contribution and picking whatever few investments offered by the fund.
Pension payments are guaranteed? Again, no, they're not. Lol
The only "guarantee" comes from the equivalent of the FDIC for pensions, BUT, it's capped at a specific amount per person. After the cap, you're out of luck.
401(k)'s allow corporations to continually issue new stock...lol what?
No, their Articles of Incorporation allow them to issue new stock. It's completely separate from the 401(k)...you're not even required to offer your company stock inside a 401(k).
This is what I'm talking about, you're throwing out nonsense because you don't know anything about the subject.
You've completely ignored that pension payments typically don't update for inflation meaning your payments today are worth much less in 10 -20 years, pensions aren't portable, and pensions reduce worker mobility.
Maybe next time do some actual research on how pensions function?
Prestigious_Load1699 | 9 minutes ago
His point is that traditional pensions and 401k’s both fundamentally rely on heavy growth from the stock market.
You suggest there’s some meaningful difference between a failing pension fund and a failing 401k.
There is none. The worker gets screwed either way.
AddanDeith | 6 hours ago
Have you considered making your own carefully curated economics sub as opposed to thumbing your nose?
Adventurous-Roof488 | 11 hours ago
Nearly 60% of adults in the US own stock, either individually or via a retirement account. Pensions invest in riskier assets to achieve return obligations due to underfunding.
Inevitable__Thanos | 11 hours ago
Top 1% owns 50% while the top 10% hold 87-93%. And 40% of people don't benefit at all from the market lmao
MimiVault | 11 hours ago
I dont get why so many people cant grasp this. Even if our 100k turns into 1 million in 25 years, someone’s 100 billion is turning into 1 trillion. Musk’s 800 billion into 8 trillion. There’s no catching up and the gap is just going to keep growing.
McCool303 | 10 hours ago
Musk’s companies receive 4 million dollars a day in government subsidies. He has the gaul to stand on stage and claim that feeding the American children of immigrant mothers is theft of American labor.
microdosingdayquil | 5 hours ago
gall
but I do agree he has a transalpine skull shape
McCool303 | 4 hours ago
lol, thanks. Been playing too civ 6 with my son in the hospital. Just one more turn……
Mbstranche08 | 10 hours ago
Correct. unfortunately our currency does not have room to weaken any further. Credit expansion at this time is not an option. Working in finance you can see it clearly. After debasing our currency in 2020 in 2021 the goal was to try to get through the boomers under the fiat financial system. We don’t think it’s going to hold. A return to hard money is inevitable. We’re getting laid off in droves here and the markets are at ATH. The largest problem right now is that in private credit we have a $5 trillion hole. A few of the Titans went to the BIS to lobby for help and got shown the door no backstop from the fed. So here I am. You hiring?? 😂😂
Adventurous-Roof488 | 10 hours ago
You would prefer not to have a million dollars if someone else has a trillion dollars? What bizarre thinking.
actuallyapossom | 9 hours ago
How did you arrive at that conclusion by what they said? Lmao.
Adventurous-Roof488 | 9 hours ago
“There’s no catching up and the gap is just going to keep growing.”
You must not have read it or understood it. One of the two. Lmao
actuallyapossom | 9 hours ago
That doesn't say anything about forgoing 1 million if someone else has a trillion.
Which is what you questioned:
"You would prefer not to have a million dollars if someone else has a trillion dollars? What bizarre thinking."
Turning reply notifications off, I don't have time to teach you to read.
Adventurous-Roof488 | 9 hours ago
It compares people having 1 million and 1 trillion dollars. I’m sorry…you’re really struggling with this? Or you can’t admit you misunderstood it?
McCool303 | 11 hours ago
Exactly, the article states they own some. Just not enough. The compensation and growth isn’t enough to build a sustainable strong middle class. And I’m tired of CEO’s, investment bankers and hedge managers telling me otherwise. 401k’s give businesses plausible deniability to not provide adequate retirement compensation and then blame the employee for making bad decisions when market growth matched with compensation isn’t enough for retirement.
Adventurous-Roof488 | 10 hours ago
The big corporation I work for gives all employees 3% of salary and matches up to 6%. I find that very adequate.
McCool303 | 9 hours ago
Well your employer is very generous. The average contribution is 4.6% to 4.8%, with a median of 4%. And with the fed running a 3.4% inflation the matching barely does enough to keep up with the devaluation of the currency alone.
Adventurous-Roof488 | 7 hours ago
The contribution doesn’t need to increase with inflation because it’s a percent of salary and people receive cost of living increases. That said, wage increases are barely keeping up with inflation since the Iran war started.
Pto2 | 10 hours ago
I think this is a shallow way to frame the situation. How many people own or are on track to earn enough stock to retire? Many (I would even dare to claim most) individuals choose to invest in riskier assets because they are underfunded.
The median income today is around $50k. I’m not super familiar with the accounting to tell whether it’s better to pay out individuals more or to try to secure their future for them. In any case Im not sure we can claim most Americans are comfortably securing their own retirements.
serpentjaguar | 11 hours ago
And your point is? Way to miss the entire point.
Adventurous-Roof488 | 10 hours ago
Do you think pensions invested in riskier assets than equities/stocks is better for retirement? Next you’re going to tell me that Kalshi and sports betting is part of your retirement plan.
TechnicalInternet1 | 10 hours ago
So 40% are cooked.
Great way for chaos and populism to rise
Adventurous-Roof488 | 10 hours ago
The number of people owning stock has been growing. Are you suggesting stock ownership causes chaos and populism?
TechnicalInternet1 | 10 hours ago
Did u read the comment? 40% don’t have it.
So they are “missing” out on prosperity.
And stock ownership ain’t growing fast enough as you can see!
Adventurous-Roof488 | 10 hours ago
Nothing is stopping them from buying stock.
TechnicalInternet1 | 10 hours ago
If the only way to make money is with stocks.
And you own 0 stocks and work.
How do you make money?
It’s a circular wheel where the stock holders are already filthy rich and keep making money.
If u can’t afford rent are you supposed to borrow money to buy stocks? No that’s dumb as hell
Adventurous-Roof488 | 10 hours ago
Tf you talking about? Get a job, invest savings? You think 40% of the US can’t make rent? Is this an economics sub?
TechnicalInternet1 | 10 hours ago
Tf u talking about. U think 50 dollars a week is gonna make u rich.
If ur job pays shit. U are cooked. Do u need to understand that?
And if u got a shit job u ain’t buying stocks!
Adventurous-Roof488 | 9 hours ago
If you invested $50/week in the S&P 500 over the past 30 years it would be worth ~$500k today. You would have invested $78k and made $400k+ in returns.
Again, is this an economics sub??? U are cooked.
jhamels | 8 hours ago
Lmao why don’t they just eat cake comment
Adventurous-Roof488 | 7 hours ago
You think 40% of adults can’t save any money?
jhamels | 52 minutes ago
Groceries have gone up what 50% in four years, gas is up 100% from a year ago, rents continue to climb, interest rates just went up, so no…40% is probably too low of a %.
ZEALOUS_RHINO | 10 hours ago
When you think about it, the problem is there are only a few dozen companies driving like half the stock market gains. Even if you expand it to the the SP500, their employees only represents 6% of the population (20 million people). Hell, Nvidia alone employees just 42,000 people and drives almost 10% of the profits generated by the entire stock market. The knowledge work is concentrated in Silicon Valley and all of the production work gets offshored to cheap foreign labor. When you strip out the millions of low level employees at companies like amazon and walmart, the number of well compensated SP500 employees drops much further.
The fact is these tech monopolies that print money are able to increase revenues and profits without increasing headcount through leveraging technology and outsourcing. Apple has maybe 50k high paid jobs in the US and employees millions of people through its supply chain in Asia. The result of monopoly is pricing power, margin expansion, and fewer choices for consumers.
I guess to some degree Google can squeeze employees but I don't think this article is fighting for the Google employee making $450,000 and saying he should be getting a bigger share of profits and making $850,000. That might fix this chart but it does not fix the underlying problem of limited opportunities for jobs people actually want and wealth inequality.
HyperTextCoffeePot | 12 hours ago
I would postit that it is a result of this terminal phase of the dollar as the global reserve currency. The system breaking is creating all sorts of strange and sometimes counterintuitive effects. Shame that our politicians had neither the foresight nor the will to prevent any of this.
You can clearly see how the rise of globalism in the 80s started to break the system, but the powers that be were too busy swimming in capital gains to notice its effects on the peons.
Mbstranche08 | 8 hours ago
We knew the leveraged buyout would do us in. Nobody cared it was a license to print money. Now it’s ending. The fed wont backstop the corporations or municipalities. Private equity has been left to rot. The music has stopped.
M00n_Slippers | 3 hours ago
Yeah, no shit. That's what capitalism does. It rewards capital ownership and sequesters that ownership into a tiny group of people. It's just monarchy again with extra steps.
iloveurarse | 12 hours ago
This is what 50 years of Bork / Chicago school of economics Monopolies are good buy all the judges to make decisions this way does to a country. Trickle down oppression.
Virtual_Magazine_860 | 9 hours ago
Chicago school was pretty forceful about their disagreement of years and years of taxpayer funded bailouts. It took many years of getting to the point we are now and it took a lot of taxpayer bailing out of corporate America to get to the point we are now.
Mbstranche08 | 8 hours ago
Yep. They’re not going to bail us out. It’s over. Finance will not be a part of the economy. I knew as soon as the leveraged buyout came into play we were in over our skis. Nobody cared though it was a license to print money.
ironicmirror | 10 hours ago
So Goldman Sachs is supporting socialism...... By saying it's bad for all of the wealth to go to the people who supply the capital.
Hmmmm..... I think society is in trouble.
Gvillegator | 9 hours ago
Some wealthy people see what’s coming and realize that their world exists only as long as the masses allow it to. Eventually societal erosion accelerates beyond anyone’s control, and that’s when the really bad stuff starts happening.
ironicmirror | 9 hours ago
Yup but GOLDMAN saying this out loud is just wild. It lets us know how close we are to 1780s France...
Mbstranche08 | 7 hours ago
It’s over. Nobody has come out publicly and stated it but finance is over. There is going to be some staged, AI cyber attack returning the dollar to a commodity backed dollar canceling all debt including your mortgage everybody’s debt. The only time in history, the Rich take the hit deflationary deleveraging. The Kings become citizens we had one hell of a run though.
failedaspotcheck | 11 hours ago
At what point in history has capital not had a better return than labor? This really shouldn't be a shocking headline at all.
The average American owns a home and a 401K. It seems kinda crazy to construe those things as "capital" in any meaningful way.
Obvious_Chapter2082 | 12 hours ago
Labor’s falling share doesn’t really have much, if anything, to do with “rewarding capital”
Part of it is the large increase in sole proprietor income, which these statistics capture solely as capital income (even when it’s really not). Part of it is depreciation taking up a larger share of gross GDP over time, which artificially lowers labor’s share (even though it’s partially a reflection of labor productivity). Part of it is that consumer prices have inflated more quickly than output prices. And part of it is the increase in foreign investment, which doesn’t have a labor-equivalent
superskink | 12 hours ago
I mean we have lowered tax rates and created loop holes all to benefit capital. We have spent 50 years making unions harder, undercutting worker power and reducing regulation. So yes it does.
skwander | 6 hours ago
Oh man. If only someone could've seen this coming and articulated methods for the working class to like, idk just spitballing here, seize the means of production or something.
AdZealousideal5383 | 4 hours ago
Well, right, Piketty proved this thirteen years ago. A capitalist system will eventually crumble under its own weight unless some amount of wealth is redistributed because return on capital grows faster than economic growth.
Low_Ability4450 | 3 hours ago
So an important issue there isn’t simply that the labor gets a smaller share but it’s who owns the capital capturing the gains a d also with AI that question might become even more important in the future
Osiris_Raphious | 3 hours ago
Been saying this for years, why most people be defending a system that by name has given them no capital. Most people are wage earners, and are servicing debt... Where is the capital? In the hands of the few..
PowerfulLocation5718 | 9 hours ago
Yep, too many lottery tickets! Pointless working. Wealthy got ridiculously rich. 401 k holders cashing in on a free ride retiring early. I’m worth my carbon imprint. We need a new system in place. We’re being segmented.
spastical-mackerel | 6 hours ago
Well yeah, the system was designed by Capital for capital. Our great grandfathers resisted and put the oligarchs in their place, but we were too easily distracted by drag queens and trans kids. So here we are
ihadagoodone | 6 hours ago
the thing is, it wasn't the drag queens nor the trans kids. it was a failure to recognize propaganda. We're all vulnerable to it and we're all effected by it in today's super connected digital age.
spastical-mackerel | 5 hours ago
It’s a failure to meet propaganda with counter-propaganda. One side is playing badminton, the other side is playing murder ball
ihadagoodone | 5 hours ago
more like badmitton vs skeet shooting.
klingma | 12 hours ago
Fractional shares exist and you can invest with as little as $1 or $2 on most brokerage sites now with zero fees.
If the rewards are moving towards stock then this is literally the most accessible they've ever been in history.
68Warrior | 12 hours ago
Compounding gains and interest are truly magic, and investing 1 or 2 dollars at a time is certainly better than nothing, but somebody on a median American salary investing numbers that small will never, ever get ahead to the “ownership” class. I would go as far as to say unless you’re maxing a 401k early in your career and investing on the side, the goal posts have moved too far. That is, of course, if we’re talking about “the American Dream” and not simply starving to death.
klingma | 8 hours ago
It's not about getting to the "ownership" class it's about building wealth or at least a cushion and being proactive with your finances.
If someone parked $100 in their bank's savings account earning 0.5% a year, I'd tell them to move it to a HYSA. Sure, it's not going to be a massive amount of money but it's an easy way to get more money with minimal effort.
Due-Operation-7529 | 11 hours ago
I definitely agree. The problem is despite the accessibility, there is still not enough people taking advantage of
klingma | 8 hours ago
I'm aware, people don't realize how much better it is today than it was even a decade ago.
When I started out trading I had fees per trade AND had to buy whole shares, no option for fractional shares unless I wanted to invest in an autodraft style investment. Plus, minimal deposit requirements to start an account.
Today, plunking $5 a week or month into an S&P 500 or similar index fund when you get your first job is simple.
Mbstranche08 | 11 hours ago
This will change very soon. We’re moving to a new currency. I’m not sure if finance will be involved in the western world’s new system. I’ve spoken with a few folks and came up with a thesis. The only way out from here is to have a global debt jubilee coupled with a pinning of the dollar to a basket of commodities. Possibly a digital currency that is decentralized from the federal reserve and IRS. We simply can’t inflate through this credit cycle. We could…. Yet tons of wealthy individuals would be subject to extreme violence from their own law-enforcement and military personnel along with ordinary citizens. There is a codependency between worker and wealthy. You can’t just have a few thousand people accruing all the wealth. Their money becomes useless because there’s no market economy to use it in. When they shut down the stock market and the lights go out don’t panic. It’s all planned out.
TheDismal_Scientist | 11 hours ago
The reason is because big tech companies can scale up revenue quickly, tend not to have/need much competition, and tend to have quite low costs comparatively. That being said, things are obviously improving for the average person even if the share is declining
growaway9172 | 8 hours ago
> That being said, things are obviously improving for the average person even if the share is declining
I think the jury is still out on this, at least in the micro. For instance while life expectancy reaches record highs, birth rates are falling precipitously.
Houses are much larger, safer, and more comfortable than they were 50 years ago, but the home-price to income ratio is at record highs, making it much harder to get one.
glutenfree123 | 12 hours ago
https://media1.giphy.com/media/v1.Y2lkPTZjMDliOTUybHR1YnJjcXdlZzlrY3k4YW85emZmZ3JlYTNweHR3anZncnV1cWh6ZSZlcD12MV9naWZzX3NlYXJjaCZjdD1n/gIqusaeYxgSiY/200w.gif
Fickle-Marsupial4658 | 6 hours ago
Would raising salaries reduce company profits, and how might that affect the distribution of wealth and the value of existing assets?
Could higher wages contribute to rebuilding the middle class, and what other factors would influence that outcome?
Alternatively, would increasing corporate taxes be an effective way to address the deficit?
What potential benefits and trade-offs should Congress consider when evaluating these approaches?
jnordwick | 7 hours ago
Another way of saying this is that there is a high risk premium.
Capital investment is more risky than selling your labor, and the market is pricing for it.
Why is that happening is the important and driving question. How do we make risk pay less?