Comment by ethbr0 | Hacker News Reader

Comment by ethbr0 | Hacker News Reader

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> Record profits across the board for corporations, highest CEO pay ratios ever recorded, massive housing bubble; the monied class is making off with their spoils and cashing the stock market in

> Meanwhile they are sticking it to consumers

That's a lot to parse, but I'll give it a try.

"Record profits across the board for corporations" - Record profits is exactly what you would expect with lingering low interest rates + lowered rates from COVID response + unleashed demand post-COVID. This was by design, because profitable companies don't fire everyone and create a recesssion from unemployment. Or tank the stock market and thus housing market and thus create a recession.

And you're a quarter out of date. Profits and margins have been compressing in Q1 2022 and look to continue.

"Highest CEO pay ratios ever recorded" - Exactly what you'd expect with a roaring stock market, given equity-biased compensation. That will correct, as it always does.

And furthermore, talent compensation is already increasing and on every HR department's priority list. [0]

"Massive housing bubble" - Low interest rates + stimulus + lack of supply + sudden demand spike = price spike. Fed rate hikes will cool this off fairly quickly.

"The monied class..." - You mean, everyone?

"... making off with their spoils and cashing the stock market in..." - Reallocating and diversifying assets?

"Meanwhile they are sticking it to the consumers with inflation..." - Who is "they"? Some generalized bourgeoisie who control the means of production and arbitrarily set prices?

See earlier point (and google for statistics) and margin compression for what's actually happening: companies are passing along less than all of their own cost increases.

[0] https://www.pwc.com/us/en/library/pulse-survey/executive-vie... (I hate big-4 management consulting pablum, but it's a quick distillation)

I'm following along with your breakdown, but I'm not clear what point you're trying to make here?

> "The monied class..." - You mean, everyone?

Are you asserting that you believe the parent is using "The monied class..." to mean everyone? Which doesn't seem to be the case.

Or are you asserting everyone belongs in "The monied class", if so, that seems so overly broad as to be a bit ridiculous?

To me, the subject of "the monied class is making off with their spoils and cashing the stock market in" seems intentionally generically-bad, so as to be outrage-driven agreeable to everyone.

Are we talking about the hyper-wealthy? Business owners? Business managers? Investors in general? It's unclear.

There are a lot of complicated things going on and being generically angry at people with "more" money is uninformative and unproductive.

As near as I can tell, the parent's policy prescriptions amount to (1) we should allow asset bubbles to pop harder, (2) we should have created less(?) or more strictly controlled(method undefined?) COVID emergency debt, and (3) we should implement price controls for consumer goods(?).

Frankly, it IS outrageous that a few dozen or hundred people own more wealth than 50% of the population. It would be one thing if that wealth was well and duly earned, and well and duly enjoyable. But when an individual commands hundreds of thousands of lifetimes of wealth[1], an unimaginable sum that they cannot even physically enjoy in their time on Earth, and at the same time both pursues more money and tells us that they should be taxed less, I call fucking bullshit!

[1] At $300 billion supposed net "worth", Elon Musk could retire ($3 million a pop) literally 100,000 times over. Or, he could retire, not making another cent, and live one hundred thousand times better than the average person. If his wealth only grew at par with inflation, he could literally spend $100k a year for three million years.

The fact that this much money is earmarked for this person, or any person really, is only possible because the enormous pyramid schemes they are able to set up which are paid into by speculative investors.

In my frank and honest opinion, there are NO words you can say, NO ideas you could have, NO labor that you could undertake, and NO buttons that you can push that morally justify the tax on humanity's subsequent activities that funnel that much wealth to you. Hands down. And with that money you have zero goddamn problems that justify you offering policy input that personally benefits you. We should shun such money addicts, not lionize them.

At that level it's not wealth, in the sense that we think about wealth: it's relative power.

The power to make something happen. Like "Long range electric cars should be a thing, now" or "Reusable rockets should be a thing, now." Even and especially when most other people think it's impossible and disagree with you.

Or you can just build a gold-plated swimming pool and ensure your descendants never have to work.

Is that productive? Eh. Versus what? It certainly allows for more risk-taking than government, minimum-cost bidding projects would target. DARPA et al. aside.

It's certainly not fair.

But from a fairness of opportunity perspective, there are certainly more egregiously-born examples who have objectively produced less to show for it than Musk. Or than Ted Turner, to use another random positive example. (E.g. Barbara Hutton for a negative example)

Elon Musk doesn't have 300 billion dollars. He owns 17% of a company that, if all the stock got sold at its current price, would be worth 743 billion dollars (plus similar for SpaceX, so I think your estimate is too high). Similar situations are true for most billionaires. They're not hoarding money. They have built and own organizations that produce very valuable goods and services.

Hacker News is a forum for entrepeneurs. The idea that successful entrepeneurship results in valuable companies shouldn't be foreign. Nor the knowledge that societies that confiscate the fruits of successful entrepeneurship, will soon not have any entrepeneurship at all.

Maybe the consequences of that in terms of individual wealth ownership are unpalatable to you, but the alternative would result in an option that is net significantly worse for society.

> confiscate the fruits of successful entrepeneurship

I don't accept this framing. That framing is what I thought 20 years ago. It's been the root of a major realignment of my thinking in realizing that these people more accurately have been successful at creating large organizations of people that instead do that fruit production, fight to keep themselves on top of that organization and channel the majority of the profits of those organizations to themselves. How else could you explain the massive, some would call obscene increase of CEO pay ratios over the past four decades? Are CEOs 10x or 100x more productive or good at making decisions than four decades ago? Do they do 10x or 100x more work? It's completely implausible. CEOs continue to be compensated insanely well, even when they make bad decisions and their companies go under.

The real answer is such titans have been more successful at changing the culture to make it acceptable to channel a larger and larger portion of their organization's profit to themselves. It's all mathematically impossible that these people could have done anything to produce so much more "entreprenurial" fruits themselves. Rather, they are the ones confiscating those fruits from their employees and their companies and are benefiting from the casino-like nature of speculative investment markets fueled ultimately by money created out of thin air by debt.

And on top of that, they tell us that they are being stolen from! Gaslighting horseshit.

> Maybe the consequences of that in terms of individual wealth ownership are unpalatable to you, but the alternative would result in an option that is net significantly worse for society.

The alternative? Surely there are more than two ways of organizing society: (i) one with successful entrepreneurship but large wealth inequality, and (ii) presumably one without successful entrepreneurship along with various other characteristics that make that society clearly "net" worse than it would be in (i).

For example, I could imagine a tax regime which resulted in a cap on individual wealth at, say, 1% of GDP. Or 5%. Or 0.1%. Or ...

It's not clear to me that there's an unambiguous demarcation between only two types of societies, and one which is observed across all possible policy or economic schemes.

You should thank Fed for pumping up stocks and keeping interest rate below inflation.

The monied class isn’t everyone, the fact that you would suggest such implies you aren’t aware of the distribution of wealth in the US.

10% of households own 90% of the stocks held by households. Close to half hold none at all.

I am indeed aware of this.

Well your statements just don’t line up in that case

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