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Comment by natenthe | Hacker News Reader

The article that this thread is based off of is literally the opposite take from my original post. The article claims that America's 1% is responsible for the wealth inequality. That is why I posted my comment. My opinion, and the "majority" opinion according to you, is that wealth inequality is because of Fed policies, not the 1% boogey-man.

The people protesting are not protesting the Fed. No institution (i.e. media, grassroots, journalists) criticizes the Fed - it's always the 1%.

But, I guess you wouldn't understand, since you make baseless assumptions about internet strangers. How would you know my net worth - do you think there aren't billionaires that share my "mainstream" opinion?

Your fallacious logic and personal attacks against me do not diminish my argument. In fact, since you cannot attack the substance of my argument, you have already admitted defeat.

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I have nothing against you personally. I'm just refuting your idea that Fed actions from the 2010s are responsible for wealth inequality that has been rising since the 1970s.

So how do you explain everything that happened on the wealth inequality front from the 1970s up to the financial crisis of 2009?

I don't agree with everything in the original article either, but many of the points it made are correct.

The 2010s were especially crazy, but I’m pretty sure this criticism of Fed policy extends back to at least the 1990s.

So this all started when the US went off the gold standard then?

No, the oil shocks of the 1970s were short term disruptions which unsettled things, but the big durable change was the major tax burden shift under Reagan.

>the oil shocks of the 1970s were short term disruptions which unsettled things

Which led to the removal of the gold standard by those who knew the outcome would proceed as it has.

If Reagan didn't shift the tax burden the very wealthy would not have been able to recover their massive losses as rapidly.

> So how do you explain everything that happened on the wealth inequality front from the 1970s up to the financial crisis of 2009?

Are you able to articulate why you believe "because Fed policy" doesn't apply as a valid argument for 1970 through 2009?

> how do you explain everything that happened on the wealth inequality front from the 1970s up to the financial crisis of 2009?

In one word: computers. In tsunami after tsunami from 1975 to the present, computers have revolutionized everything we do. I remember one tsunami in 1975, when slide rules in September were $125 and by December they were $5 and in January they disappeared. The calculator had arrived. In 1980 at Boeing you could hear the roar of the tsunami coming in the form of CAD. Then spreadsheets, word processing, on and on.

It's no coincidence that the biggest companies in the world are all American, and all computer companies.

The big increase in wealth was created by the computer companies, and accrued to the people working in them and those smart enough to have invested in them.

BTW, according to Google: "The top 1 percent of taxpayers paid roughly $616 billion, or 38.5 percent of all income taxes, while the bottom 90 percent paid about $479 billion, or 29.9 percent of all income taxes."

> and those smart enough to have invested in them.

Correction: Wealthy enough to be able to invest in them.

or early enough

$1,000 invested in AMZN is now worth over $1M. or $10 in Bitcoin would have done the trick.

Do you understand how poor some people are?

This is a different goalpost. The story is about the top 1 percent versus the bottom 90 percent.

The bottom 90% contains people that are too poor to invest in stocks.

https://www.cbsnews.com/news/nearly-40-of-americans-cant-cov...

I've known many people like that. They weren't poor, they just overspent their income. It's common to be middle class and have no money.

I think the headline is misleading. Only 12 percent flatly said they couldn't pay for the expense. The 40 percent includes everyone who would take on debt and pay it off over time (i.e. not immediately in the next cc statement), or else sell something. People who choose to live right at their level of income would included, regardless how high that income is, and even when it is possible for them to make adjustments when surprises come along.

The survey also found 75 percent of people responded they were living comfortably or "doing ok".

A lot of people did invest early in tech stocks... Pets.com, Webvan, Boo.com. And then there is crypto:

"144 ICOs Launched During 2017 Failed Last Year" https://news.bitcoin.com/144-icos-2017-failed/

Do I really need to illustrate how dumb it is, the idea that the stock market and cryptocurrency are the cure to poverty?

It's far more likely to work than investing in lottery tickets.

Besides, you can just invest in the S&P500 via SPY.

The thing is there are were a lot of dot coms back then and no one really knew which one would have been the next Amazon. The entire push behind diversifying one's income is to ensure that people who don't have lots of $1000's to spare don't lose $1000s investing it behind few stocks.

If you know the future. Tells us a few stocks where investing $1000 today would give you a million in 2 decades.

If you invest $1000 per year at 7%, you'll have $45,000 after 20 years. After 40 years (age 25 to 65), $215,000.

https://www.calculator.net/investment-calculator.html

For $5,000 per year, you'll have $1,073,000 after 40 years.

7% is the average stock market return, adjusted for inflation.

If you invest $0.00, you'll have $0.00 after 40 years.

I feel as if this opportunity is past us. Any company with the potential for that amount of growth is going to get bought out by multi-billion $ corps to further increase their already out of reach stock prices.

> out of reach stock prices

Robinhood enables buying fractional shares.

Robinhood has conclusively shown in the last month that ordinary Americans, even poor ones, have access to investing in stocks. This includes access to margin and sophisticated options trading.

Access does not mean they have $10k to invest.

If you can buy video games, beer, pot, lottery tickets, you can invest in stocks.

On the TV news a couple weeks ago was a 6 year old kid whose mom gave him $60 worth of Gamestock stock. He cashed it in for $3,000.

Besides, the article wasn't about some people. It was about the majority of people.

... access that they used to YOLO some savings on some GME trade, which pretty quickly went to nearly worthless.

I'm not arguing that access in itself is bad. I'm arguing that new money speculating in the equities market often doesn't go well.

I didn't say they should invest in GME. I said it was proved they could invest in stocks.

> new money speculating in the equities market often doesn't go well.

It goes better than lottery tickets, which target the poor and the mathematically challenged. Stocks at least have an upward bias, while lottery tickets have a strong downward bias.

BTW, wealthy people lose money in the stock market, too. Stocks do not come with guarantees for anybody.

> The top 1 percent of taxpayers paid roughly $616 billion, or 38.5 percent of all income taxes

What's that as a percentage of their annual increase in wealth? By my calculation, with a wealth increase of "$2.5 trillion a year" (from the article), that income tax amount works out as a flat 25% rate.

> So how do you explain everything that happened on the wealth inequality front from the 1970s up to the financial crisis of 2009?

Of course there's never a single thing that explains a complex issue, but the root of the current Fed's monetary policy goes back to Greenspan, so the poster's argument could easily be extended to that iteration of the Fed.

Also, the 1980s is when (modern) wealth inequality really started to take off. And it's much worse today.

Fed/government actions from the 1970s are responsible for the inequality that has been rising since the 1970s...unpegging the USD from the gold standard in 1971, and the creation of the derivative market at the same time. Money used to have gravity, but now it is created magically at will -- especially in terms of derivatives. The world's money supply now doubles faster than Moore's law.

https://www.visualcapitalist.com/all-of-the-worlds-money-and...

https://www.ted.com/talks/maneesh_sethi_money_the_greatest_s...

> The people protesting are not protesting the Fed

The Fed is not the problem. Congress is the problem. The Fed seems like the problem sometimes because Congressional nonfeasance leaves the Fed, which has a narrow role and a narrow set of controls, the only player doing anything to deal with adverse economic conditions. But Congress’ nonfeasance is the problem.

Can we sum this up as: hate the referee, not the player?

um, I wonder, who works in Fed and who writes their policies?

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