- cross-posted to:
- aboringdystopia@lemmy.world
- cross-posted to:
- aboringdystopia@lemmy.world
Key Points
- The wealth of the top 1% hit a record $44.6 trillion at the end of the fourth quarter.
- All of the gains came from stock holdings thanks to an end-of-year rally.
- Economists say the rising stock market is giving an added boost to consumer spending through what is known as the “wealth effect.”
The wealth of the top 1% hit a record $44.6 trillion at the end of the fourth quarter, as an end-of-year stock rally lifted their portfolios, according to new data from the Federal Reserve.
The total net worth of the top 1%, defined by the Fed as those with wealth over $11 million, increased by $2 trillion in the fourth quarter. All of the gains came from their stock holdings. The value of corporate equities and mutual fund shares held by the top 1% surged to $19.7 trillion from $17.65 trillion the previous quarter.
While their real estate values went up slightly, the value of their privately held businesses declined, essentially canceling out all other gains outside of stocks.
There’s an argument that any one person controlling that much money is harmful to everyone else. Above $1 billion what can you even spend the money on?
Private planes don’t cost that much. Even a super yacht or the most expensive house in the world cost less. You can buy islands for less.
Once you have a billion dollars you can live off of 4% without touching the principal. You can just blow $40 million every year. No wonder billionaires think they can do anything. They can as long as they don’t spend too much.
Edit: I calculated wrong. They can live off 6% to 9% every year, since they will have to spend all their extra money so it’s not taxed 100% at the end of the year.
That’s $60 - $90 million. Just wasting it every year and replenished by growth the next year. It’s essentially risk-free, unless they pull an Elon and lose billions for no reason.
That spending would actually be really good for the economy. I like this idea better now.
I don’t necessarily see Elon’s billions harm me. I see that limit can be limiting when the individual wants to buy, let’s say, a company.
That’s why I see a hard limit like this wrong.
Far better approach would be to sanction shenanigans like private flights for 100 kilometers, uselessly huge yachts, etc. These luxuries actually make my life worse. They fuck up the air I breathe.
Society is harmed because these people can buy up news and TV companies, donate unlimited amounts to politicians, and generally fuck with the economy. No one can tell them what to do because they have so much money.
It seems like an aristocracy, which is very un-American. Once people run out of things to buy, how is their life affected by having more money? It essentially appoints them to a job they haven’t earned.
There’s no reason why Elon should run Twitter. He has no experience in Social Media. Imagine someone you work with just purchased their position and didn’t have to interview or know anything about the field. Would you respect that person? Do you think they would do the job well? It would affect you, the company, and your customers negatively.
I get your point but that would be genuinely impossible to implement it.
Imagine you would have to know how to bake before being able to buy a flour. Monitoring what can/cannot people buy based on their profession does not make a lot of sense.
Also, the person didn’t have to go through the interview process but he had to go through the process of earning that money.
Once you have over $100 million dollars, earning money is not a matter of skill. It’s an inevitability. Compound interest will make sure you and your family are wealthy for generations, unless you pull an Elon.
What I’m telling you is many of these people are bad stewards of capital. Gilded Age robber barons sucked for many other reasons, but they at least understood their industry. Carnegie or JP Morgan would have slapped most of these nepo-babies across the face.
Imagine a sports team composed based on the amount of money people have. It would suck because people are not chosen based on skill. That’s how we’re choosing executive leadership in America right now, and it’s honestly stupid.
Well yes, such a team would suck and they would loose all matches. Just like a company would collapse if a billionaire chose to run a business he has zero clue about.
But it’s his money. He would lose it and I think he should be free to lose his money. And that’s the beauty of free market. If you are cunning, you win and if you are an idiot, you loose.
So your point is, you think someone should be able to buy a successful enterprise that’s important for society and run it into the ground? And you think that’s an argument in favor of billionaires?
I’m saying the opposite. You should not be able to lose more than a billion dollars. Bets like that should rely on the judgment of many investors, hopefully people who have expertise in the industry.
We don’t allow doctors or lawyers to practice without being educated and licensed. There need to be requirements for strategically important companies too.
Even as a someone with no experience, I can be accepted as a “lawyer” by a law company. But no would ever accept me because they it would harm the company very much.
Same thing applies for companies. There is already a motivation for their leaders to lead them in the best way possible even without limited maximum amount of money. In addition, there is no such a company that is so critical that its crash would destroy the world.
There’s no real impact on anyone’s standard of living. Literally no one’s life is worse off, and the country is better off. What’s the downside?
Where did that gap of the median 99%'s assets and the assets of the 1% come from? Could it have come from wages that could have been yours if excess profit was based on how much you contributed to the organization’s productivity?
@littlewonder @theotherverion
I quit working for the establishment and corporations about 8 years ago. No more.