Tom Perkins, legendary Silicon Valley venture capitalist, apparently feels the need to carry the flag for the 1% with an oped in the Wall Street Journal. He reinforced those sentiments in an email to Bloomberg. His former firm condemned the remarks, and about nobody wants him carrying their flag.
That's interesting but it's tangential to the topic here. Unless we have absolute, rigid socialism, as never seen in history, there will be a wealthiest 1%. The question is whether they should control 5% of the wealth, or 20%, or 43% (as they did in the USA in 2012) or 50% (as they do globally now), or 80% as they appear on track to achieve, based on the 30 year trend.
Now I'll get back to tilts imposed by government the contribute to wealth concentration, oh, wait... President Obama is planning to unveil a new "Income Equality" push at his Feb 12 State of the Union address. That should be interesting.
The distribution of wealth in the USA has changed dramatically in the last 30 years. Four hundred individuals now control half of it. Viewing the economic landscape as a tilted playing field, I'm interested in documenting 1000 things that government has done, or failed to do, that contribute to the tilt.
Monday, January 27, 2014
Monday, January 20, 2014
Globally, 85 individuals have as much wealth as the poorest half of the population.
According to an Oxfam report published today citing Credit Suisse as its source, "[t]he bottom half of the world’s population owns the same as the richest 85 people in the world."
This is everywhere today, and has been erroneously reported as claiming that 85 individuals control half the worlds wealth.
The report further shows that "In the US, the wealthiest one percent captured 95 percent
of post-financial crisis growth since 2009, while the bottom 90 percent became poorer." It also shows that the USA leads the world in having wealth concentrate at the top.
I don't think there is any doubt that the wealth concentration is real, recent, unprecedented in the USA, and extreme. I have seen it claimed that it is the result of, variously, industrialization, automation, robots, globalization, and the Internet. My thesis is that it is mostly the result of many small changes in the rules of the economic game, as administered by government. I'm working on a post about carried interest, and another about traffic cameras. Barely a day goes by that I'm not reminded about something else.
This is everywhere today, and has been erroneously reported as claiming that 85 individuals control half the worlds wealth.
The report further shows that "In the US, the wealthiest one percent captured 95 percent
of post-financial crisis growth since 2009, while the bottom 90 percent became poorer." It also shows that the USA leads the world in having wealth concentrate at the top.
I don't think there is any doubt that the wealth concentration is real, recent, unprecedented in the USA, and extreme. I have seen it claimed that it is the result of, variously, industrialization, automation, robots, globalization, and the Internet. My thesis is that it is mostly the result of many small changes in the rules of the economic game, as administered by government. I'm working on a post about carried interest, and another about traffic cameras. Barely a day goes by that I'm not reminded about something else.
Thursday, January 16, 2014
Welcome
I'm serious about this.
I have some ideas, but I'm sure that there are more ideas out there, and some of mine are probably wrong. Please contribute what you can in comments, and I hope this can become a group project with contributors, guest bloggers, and regular commenters.
I'm not going to let this be a Red/Blue battleground. That topic bores me, and it's covered extensively elsewhere. The party in power may seem to take more of a beating, but that's because their governing actions are the most topical. The trend to wealth concentration at the top continued without pause through periods where both parties have had a dominance of power.
I also don't want this to become a haves and have-nots battle. That's something that reasonable people can disagree on. It relates to the topic here because the a tilted playing field tends to make one's position on the field permanent or worse, but I'm not inherently opposed to the idea that innovation, hard work, complying with the rules, and sacrifice can be rewarded.
The topic here is the rules. Specifically, the ones created and enforced by all forms of government.
Carried Interest is one such rule. If I understand it, and I think I do, individuals operating funds who share in the fund's profits, pay taxes on that profit share as if it was profit on their own investment. None of their money needs to be invested, and they have no risk of losing money if the investment goes the wrong way, but they still get the rewards of tax incentives designed to encourage investing. That seems wrong, but being wrong is not enough to get it featured here. It needs to tilt the playing field so that a class of individuals on the high side of the field tend to stay there, and a group on the lower side of the field as less chance of gaining ground. I will argue in detail that it does that, and if it holds up I'll put it on a list.
The idea is that 1000 little tilts, individually insignificant, add up to a major tilt that makes the USA something different than the land of opportunity.
I have some ideas, but I'm sure that there are more ideas out there, and some of mine are probably wrong. Please contribute what you can in comments, and I hope this can become a group project with contributors, guest bloggers, and regular commenters.
I'm not going to let this be a Red/Blue battleground. That topic bores me, and it's covered extensively elsewhere. The party in power may seem to take more of a beating, but that's because their governing actions are the most topical. The trend to wealth concentration at the top continued without pause through periods where both parties have had a dominance of power.
I also don't want this to become a haves and have-nots battle. That's something that reasonable people can disagree on. It relates to the topic here because the a tilted playing field tends to make one's position on the field permanent or worse, but I'm not inherently opposed to the idea that innovation, hard work, complying with the rules, and sacrifice can be rewarded.
The topic here is the rules. Specifically, the ones created and enforced by all forms of government.
Carried Interest is one such rule. If I understand it, and I think I do, individuals operating funds who share in the fund's profits, pay taxes on that profit share as if it was profit on their own investment. None of their money needs to be invested, and they have no risk of losing money if the investment goes the wrong way, but they still get the rewards of tax incentives designed to encourage investing. That seems wrong, but being wrong is not enough to get it featured here. It needs to tilt the playing field so that a class of individuals on the high side of the field tend to stay there, and a group on the lower side of the field as less chance of gaining ground. I will argue in detail that it does that, and if it holds up I'll put it on a list.
The idea is that 1000 little tilts, individually insignificant, add up to a major tilt that makes the USA something different than the land of opportunity.
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