"It’s Time for Major Wealth Redistribution — Yes, I Mean It."

[Loren Pechtel]

How about hedge fund and vulture capital CEOs that make money tearing businesses apart and making people unemployed?

I've already made a proposal that would stop the vultures in their tracks.

 

[bilby]

....

The idea of "personal money" being nonsensical, it really shouldn't form any part of the answer to that (or similar) questions.

You're missing the point.

ZiprHead claimed that innovation came from business putting money to research rather than profit. I was pointing out that that's not how it worked with Space-X. Space-X came about because one individual took a pile of money he made as profit from one company and used it to create a totally separate company.

You're missing the point.

In a democracy, big decisions affecting large numbers of people are taken out of the hands of single individuals and are made collectively. Obviously we don't have any perfect democracies; But that's not a reason to favour dictatorship. Or more charitably, aristocratic feudalism.

 

[DBT]

Elon Musk made all his money with the sweat of his brow and the brilliance of his own mind? Nobody else helped? Nobody else worked?

 

[Lumpenproletariat]

Pay them their competitive free-market value -- no more, no less.

If everybody could start their own business....who would do the grunt work?

Illegal immigrant and PHDs in history and sociology.

Also all those who started their own business which failed (which is a large number). Also some laid-off steel-workers and others in jobs where we don't need them. Whatever it takes.

When there's a shortage of those (grunt) job-seekers, and still an unmet need, then the wage level to them will increase in order to attract the grunts needed.

There probably never will be such a shortage, but the unfettered free market is ready to deal with it if it happens. Right now most of them (not in the underground economy) are overpaid, so there's an oversupply. Like there's an oversupply of steel-workers because they're overpaid.

But meanwhile plumbers are raking in $70/hour because of the shortage. And this will probably increase into the future, without the government doing anything to prop up their incomes like it artificially props up the incomes of the excess steel-worker crybabies whose jobs are being done in China at a fraction of the cost.

 

[Lumpenproletariat]

one factor contributing to higher CEO compensation

Mr. Musk's wealth is estimated at roughly 25 billion. Taking half of it would leave him well over 12 billion - more than enough to play around with Space X.

Musk is an outlier. What does the Walton family do with their money, other than fund right-wing think tanks that promote low taxation and anti-union efforts?

How about hedge fund and vulture capital CEOs that make money tearing businesses apart and making people unemployed?

One valuable service these tycoons provide is precisely to get rid of some of the unneeded overpaid workers (as well as dissolving some less competitive companies). "Letting go" that which is uncompetitive is a dirty job which has to be done by someone, in order to keep down the costs, and in some ways it's difficult to find the needed SOBs who can do this, so that this in turn is another factor driving up their own salary.

The demand for these SOBs wouldn't be so high if we didn't need them to offset our false religion of overpaying workers based on pity for them, thus forcing us to find the needed SOBs who are able to do this dirty but necessary job.

 

[Canard DuJour]

There is an idea that I bumped into recently, that coordinated market economies like the Scandinavian countries are actually only able to afford their social systems because there are liberal economies like the USA that are doing all the "hard" innovations on their behalf. It's much easier being a follower than a leader. If the United States were to enact same kind of programs, it would crash not only the economic output of Americans, but also those in the countries that are piggy-backing on its success.

Which is almost certainly bollocks. Growth in the US economy, all OECD economies and the global economy were all markedly higher during the co-ordinated market Bretton-Woods era of low inequality when the US economy was much more like the European social democracies.

Maybe. But back then the world economies were much more protectionist, and much less interconnected than now.

What I said then.

Not to mention that everyone was recovering from WW2.

The US economy was bigger by the 1960s than it would have been with pre-WW2 growth rates. And pre-war capitalism was also more "cut-throat" than "cuddly" post-war Keynesianism.

Anyway, I found the original article that introduced the idea. Excerpt:

We can’t all be like the Nordics, can we?

The main result of this theoretical investigation is that, in the long run, all countries tend to grow at the same rate, but those with cuddly reward structures are strictly poorer. Notably, however, these countries may have higher welfare than the cut-throat leader; in fact if the initial gap between the frontier economy and the followers is small enough, the cuddly followers will necessarily have higher welfare because of the greater social insurance that their institutions provide. Thus, our analysis confirms the intuition that all countries may want to be like the Nordics with a more extensive safety net and a more egalitarian structure.

Yet the main implication of our theoretical framework is that we cannot all be like the Nordics! Indeed it is not an equilibrium choice for the cut-throat leader, the US, to become cuddly. As a matter of fact, given the institutional choices of other countries, if the cut-throat leader were to switch to such cuddly capitalism, this would reduce the growth rate of the entire world economy, discouraging the adoption of the more egalitarian reward structure. In contrast, followers are still happy to choose an institutional system associated to a more egalitarian reward structure. Indeed, this choice, though making them poorer, does not permanently reduce their growth rates, thanks to the positive technological externalities created by the cut-throat technology leader. This line of reasoning suggests therefore that in an interconnected world, it may be precisely the more cut-throat American society, with its extant inequalities, that makes possible the existence of more cuddly Nordic societies.

What I said then.

And, contrary to the article's assumption, the US is not "widely viewed as more innovative [than Denmark, Finland and Sweden]". Bloomberg, for example, now ranks the US behind Denmark, Finland and Sweden (and Germany, South Korea, Singapore, Israel and Switzerland). The US is now widely considered to have an innovation crisis.


The article presents what it calls a "theoretical investigation". The conclusions follow from the assumptions as "impetus for detailed empirical study". You couldn't even call it hypothesis, i.e. attempt to explain observation.

Most of the neoliberal reforms were based on the same kind of a-priori assumption. Higher growth was expected along with an inequality trade-off. Well we got the inequality, but not the growth.

The average American, while not worse off than before the neoliberal reforms, is thus worse off than they would have been as a result of them. And whatever the intention of said reforms, they were deliberate and political - not the emergent result of consumer choice.

 

[Harry Bosch]

Elon Musk made all his money with the sweat of his brow and the brilliance of his own mind? Nobody else helped? Nobody else worked?

The average salary at Paypal today is $108,000. Not so bad!

https://www.payscale.com/research/US/Employer=Paypal,_Inc./Salary

 

[Harry Bosch]

And when he spent his personal money on his pet idea that money wasn't taxable.

But the point is that Musk would not have had any personal money and minimal assets to spend if he had been taxed heavily for paypal. Even with all the amount he had, SpaceX barely survived the 2008 downturn. Blowing up rockets was very expensive for him.

Mr. Musk's wealth is estimated at roughly 25 billion. Taking half of it would leave him well over 12 billion - more than enough to play around with Space X.

I think that one way to solve this problem is for companies to stop going public. If Elon dosn't go public, then his wealth is as measured as accurately and not published. This would solve a lot of hurt feelings. And we can focus on the real gap hurting people, the income gap.

 

[DBT]

Elon Musk made all his money with the sweat of his brow and the brilliance of his own mind? Nobody else helped? Nobody else worked?

The average salary at Paypal today is $108,000. Not so bad!

https://www.payscale.com/research/US/Employer=Paypal,_Inc./Salary

The point of discussion isn't about reasonable or well paid workers.

 

[Harry Bosch]

Elon Musk made all his money with the sweat of his brow and the brilliance of his own mind? Nobody else helped? Nobody else worked?

The average salary at Paypal today is $108,000. Not so bad!

https://www.payscale.com/research/US/Employer=Paypal,_Inc./Salary

The point of discussion isn't about reasonable or well paid workers.

Sorry. You're right. I do understand that the reason to tax wealth on it's own and knock people down a peg or more is not to help the workers.

 

[Elixir]

the reason to tax wealth on it's own and knock people down a peg or more is not to help PayPal workers.

FIFY

It's more about helping those who need it.
IMHO it's well worth it when a person's "pegs" are such that you can remove a significant number of them without changing that person's position on the scale of wealth or social status.

 

[Worldtraveller]

Mr. Musk's wealth is estimated at roughly 25 billion. Taking half of it would leave him well over 12 billion - more than enough to play around with Space X.

Musk is an outlier. What does the Walton family do with their money, other than fund right-wing think tanks that promote low taxation and anti-union efforts?

How about hedge fund and vulture capital CEOs that make money tearing businesses apart and making people unemployed?

Exactly, if you made a comparison of all the people with, say $500mil or more and what they do with their money, I'm betting the side of the list that has 'greedy rapacious assholes' is going to be much longer than either the 'beneficient charity' or 'crazy venture capitalist' list.

...by a large margin.

 

[Toni]

... That’s right, a new study shows the richest people in the world have stolen trillions from average Americans....
And to be clear, this money has been stolen from nearly every American....

I'll repeat what I said in a similar recent thread. Why the perverse need to speak of "stealing"? In a recent movie Mark Wahlberg made more money than his co-stars. Did he "steal" from them? Toyota Corporation has a lot more wealth than I have, yet they didn't sell me my pick-up for free; I had to pay for it. Did they steal from me? A lot of wealth transfer is associated with actual theft (Wasn't it Julius Caesar who wrote "I came; I saw; I stole" ?) but it is counter-productive to frame wealth and income inequality as a morality play. For one thing it gives right-wingers a (valid!) reason to argue against reform.

We want (or should want) to reduce (not eliminate) income inequality because it would have social, economic and humanitarian benefits, but not because the poor are somehow more "moral" than the rich.

We should support progressive changes to the tax code NOT to punish the "evil rich," but to improve society. And some level of inequality is good! We just need to steer toward a more moderate level, away from the excesses of this new Gilded Age.

Progressive reforms should be directed. Inherited wealth is a better target for taxation than entrepreneurial wealth. And the income of Wall St. traders is a better target than the income of top surgeons and entertainers. NOT because Wall St. traders are "evil", but simply because their activities do not benefit society.

Hope this helps.

I get your point but: it is immoral for those who have power and money to make all of the rules to place those who do not have power and money at such an extreme disadvantage.

Robert Reich
@RBReich
·
Aug 27, 2020
CEO-to-worker pay ratio in 1965: 20-1

CEO-to-worker pay ratio in 1989: 61-1

CEO-to-worker pay ratio today: 320-1

American capitalism is off the rails.

https://twitter.com/RBReich/status/1299053109235384320?s=20

 

[laughing dog]

Mr. Musk's wealth is estimated at roughly 25 billion. Taking half of it would leave him well over 12 billion - more than enough to play around with Space X.

I think that one way to solve this problem is for companies to stop going public. If Elon dosn't go public, then his wealth is as measured as accurately and not published. This would solve a lot of hurt feelings. And we can focus on the real gap hurting people, the income gap.

The wealth gap is a real gap and it hurts people as well. Extreme Wealth means power. That has been well understood for centuries. One of the major rationales for the federal estate and gift tax was to reduce the transferability of extreme wealth and its power down generations. The power that goes along with extreme wealth is anti-democratic.
The extreme inequality of income is an important problem for any country that strives for a humane and civilized society. But so is the extreme inequality of wealth.

 

[DBT]

The point of discussion isn't about reasonable or well paid workers.

Sorry. You're right. I do understand that the reason to tax wealth on it's own and knock people down a peg or more is not to help the workers.

The issue is excessive wealth and excessive power concentrated into the hands of a small percentage of the population....where a peg or two lower would hardly be noticed, yet alone cause hardship.

 

[Harry Bosch]

Mr. Musk's wealth is estimated at roughly 25 billion. Taking half of it would leave him well over 12 billion - more than enough to play around with Space X.

Musk is an outlier. What does the Walton family do with their money, other than fund right-wing think tanks that promote low taxation and anti-union efforts?

How about hedge fund and vulture capital CEOs that make money tearing businesses apart and making people unemployed?

Exactly, if you made a comparison of all the people with, say $500mil or more and what they do with their money, I'm betting the side of the list that has 'greedy rapacious assholes' is going to be much longer than either the 'beneficient charity' or 'crazy venture capitalist' list.

...by a large margin.

Now that is going to be in interesting read. Could you please post the link though?

 

[bilby]

The point of discussion isn't about reasonable or well paid workers.

Sorry. You're right. I do understand that the reason to tax wealth on it's own and knock people down a peg or more is not to help the workers.

The issue is excessive wealth and excessive power concentrated into the hands of a small percentage of the population....where a peg or two lower would hardly be noticed, yet alone cause hardship.

The issue is people having sufficient wealth, relative to the median, as to be able to unduly influence political decisions.

An aristocracy whose power derives not only from their votes (which should have the same value as every other citizen's), but also from their wealth, is anathema to a democratic society. Nobody should be that disproportionately rich. If money is speech, then a democracy needs to ensure that nobody's able to drown out the voices of millions of their fellow citizens.

The alternative is feudalism.

 

[ZiprHead]

Any truth to this?

 

[Loren Pechtel]

....

The idea of "personal money" being nonsensical, it really shouldn't form any part of the answer to that (or similar) questions.

You're missing the point.

ZiprHead claimed that innovation came from business putting money to research rather than profit. I was pointing out that that's not how it worked with Space-X. Space-X came about because one individual took a pile of money he made as profit from one company and used it to create a totally separate company.

You're missing the point.

In a democracy, big decisions affecting large numbers of people are taken out of the hands of single individuals and are made collectively. Obviously we don't have any perfect democracies; But that's not a reason to favour dictatorship. Or more charitably, aristocratic feudalism.

Reality: That's not how the important progress is made.

 

[Loren Pechtel]

Mr. Musk's wealth is estimated at roughly 25 billion. Taking half of it would leave him well over 12 billion - more than enough to play around with Space X.

Musk is an outlier. What does the Walton family do with their money, other than fund right-wing think tanks that promote low taxation and anti-union efforts?

How about hedge fund and vulture capital CEOs that make money tearing businesses apart and making people unemployed?

One valuable service these tycoons provide is precisely to get rid of some of the unneeded overpaid workers (as well as dissolving some less competitive companies). "Letting go" that which is uncompetitive is a dirty job which has to be done by someone, in order to keep down the costs, and in some ways it's difficult to find the needed SOBs who can do this, so that this in turn is another factor driving up their own salary.

The demand for these SOBs wouldn't be so high if we didn't need them to offset our false religion of overpaying workers based on pity for them, thus forcing us to find the needed SOBs who are able to do this dirty but necessary job.

You don't understand what vulture capitalists are.

They extract as much value as they can while running companies into the ground.

The economy would be better served if borrowing to do a takeover of a company was prohibited.