This, however, wouldn't allow the author to tell a reactionary "just so" story about our feckless and greedy rulers. One wonders.
I don't understand your point. The 1980s were over 40 years ago, this just happened. In fact, it's ongoing.
>"just so" story about our feckless and greedy rulers
Oh, that's your point. Yeah, your leaders trading stocks on insider info, politicians selling influence to foreign governments..it's always happened, so who cares?
So no, the point isn’t defeatism. It’s to observe that so many of these types of polemics come with a healthy dose of rose colored glass.
It's when the author drops into 'overwhelming debt ending in failure' that he drops the mask enough to show that he doesn't want any sort of government or public infrastructure. It's a libertarian, leaning anarcho-capitalist, viewpoint that explains the discontinuity in tone that permeates many of the articles I sampled from this author.
The disconnect between the short squeeze amateurs and the reality of any market was painful to witness, myself working at a large stock broker. Stocks are worth their dividend over time: stock with no dividend and with only a speculative future value are always a trap. It's ok to be conservative and expect a regular payment related to performance, it's very risky to speculate on other market participants' behavior: they have agency too, and sometimes are competent.
The market in the last, what, 20 years, begs to disagree very hard.
A huge part of the "increases" in real estate and stock market values is backed by nothing more than fever dreams.
Absolutely it's worker wages.
Not helicopter QE.
Uh uh. That's just not how it works.
Capisce?
From a practical standpoint, there's little difference between these things. It's all more money in the pool. It's not like wages are tied to productivity.
My business savings account is paying 5.5%. That's a long way from 0% in your mattress.
Not 7%, but also way better than cash.
Meanwhile, those profiting from the bubble all the time have long since cashed out.
Berkshire Hathaway paid a dividend once. 50 years ago.
(buybacks are equivalent to dividends with a favourable tax treatment)
Dividends are income.
You pay 50% less federal tax.
Any loans that the ultra-rich take out against their assets to fund their lifestyle, are going to have an associated interest rate, and a payment schedule. If they don't want to default, they'll need another source of funds to make those payments.
IF that source of funds for load servicing is a salary, they'll be paying income tax (income) + interest payments (loan).
IF that source of funds is dividends, then they may be cap-gains or income, depending on qualification status.
In either case: there is..
* A limit to how much can be borrowed, before the loan payments outstrip the loan-funding income or qualifying dividends
* In the case of income, they are still generating an income tax liability to service that loan, and also paying interest on top of it. Paying 124K/year for 10 years to pay off $1M at 4.5% means they fell into the 24% bracket for 10 years ($297.6K tax total) , rather than 37% in 1 year ($370K tax total). So while it does appear to create a tax savings -- even with the 4.5% loan interest -- funding life with loans is not the absolute "never have to pay income taxes" that my PP described it as.
Clarifications / corrections welcome.
A lot of people sell stock at capital gains, and get taxed at capital gains rates instead of income.
You're making it more complicated than it is.
I was replying to birdyrooster, who said
> borrow against the value of their inflated shares and never have to pay income taxes
... which is not about selling stock.
Source: If a company's executive takes a loan against their shares, it's disclosed in SEC filings.
Of course it was the peak, you made it so most investors could no longer buy
For someone to sell, someone else has to buy…
He just waves his hand at all that. He mentions Amazon once.
There doesn't seem to be any waving of hands.
And the primary target of the piece are low info gambling meme-stock bettors.
Honestly, that one should be prosecuted under fraud regulations. And stock buybacks that leave the company with more debt than the company had before should be banned ASAP.
Where is the fraud?
But I would not buy stock only for the company to do buy-back programs for other shareholders, especially not if the company would be in a worse shape (i.e. less net worth of its assets and debts) afterwards.
A firm has assets and operations and those are funded with either debt or equity. Borrowing money to buy back stock is simply changing the capital structure of the firm.
I find it amusing that everyone has sympathy for the the shareholders (who were given an opportunity to get out), while no one seems to feel a bit of sympathy for the bond holders. If anyone was defrauded (and personally I don't believe anyone was) it was them.
Honestly, kinda based.
This has been happening non stop since the 70s and the current state of America shows the results of 50 years of breakneck capitalism
What you’re seeing is that at this point it’s so entrenched that people can look at it and shrug instead of being horrified that instead of being a rare situation it’s “Business as usual”
Everyone should be horrified
Corporate raiding is nothing new, and financialization does let it happen at a pace that it couldn't previously - but just saying "but that's capitalism!" is quitting
Worker owned collectives have the same problems, people want to acquire power and then use it to be ahead when strategies fail and someone has to take responsibility.
How do you prevent that looks different in a market economy than a planned one (planned ones having more widespread but also more small scale corruption issues like these) - but you still do need to do the work to prevent it.
How prevalent was it from the 1940s to the 1970s?
One of the larger issues that is causing problems is the misnomer of "maximizing shareholder value" which took hold in the late-1970s and especially the 1980s (unsurprisingly the same era as Reagan).
* https://corpgov.law.harvard.edu/2012/06/26/the-shareholder-v...
When you start looking for quality material produced in a way that minimizes human suffering, no, capitalism doesn’t make this available to me in a few days or for cheaper.
People, completely as expected, chose lots of things made with shortcuts.
A gallon of locally sourced, ethically made milk is awesome. But so is a gallon of milk, a loaf of bread, a dozen eggs, and a pack of cheese slices for the same cost.
Make it clear at the point of purchase all the negative tradeoffs made to enable that Low, Low Price, and some significant percentage of people will choose to buy things that cost more.
Make sure that everyone—yes, everyone, no exceptions—has a decent amount of disposable income on a reliable basis, and that percentage will grow a lot more.
Software engineering is so well paid due to these dynamics.
It’s like capitalists completely forgot about the massively successful Great Society program (which is the only thing holding this all together still) that literally created from whole cloth most of the roads, sewers, electricity, social security, elderly healthcare, consumer protections, etc… that we all rely on everyday.
So no. That’s totally wrong, the world you live in much worse than it could have been for MOST people had generations of psychopaths not divested the public benefit aspect of organizing
Greed is NOT good
I'm sure as the game continues you won't become one of them.
IMO the real problem is that maybe 5% of the population are amoral sociopaths, and being absolutely heartless and uncaring - often with a liking for outright abuse and violence - gives them a competitive edge in almost any political and social system you can imagine.
Normal people just can't imagine that another human might operate like this.
But worse - many people seem to have some kind of bizarre deferential herd instinct to follow these crazies off the suicide cliff.
It may not be a fixable problem. We're a flawed species. Perhaps it won't be long before evolution - the ultimate owner of the casino - shrugs and moves on.
Do you think it's worse to be in the bottom 10%?
It's definitely not worse to be in the top 10%.
So where are we failing? Because I don't think we're failing anywhere on any medium-term horizon.
If you think we're failing from a short time ago, there's always ups and downs - but not a big reason to think the trend is reversing.
It has been claimed that the move from hunter-gathering to agriculture brought a lot of misery while improving efficiency according to economic measures.
Absolutely. Bob Menendez's indictment is the definition of: this is a powerful, already wealthy individual selling out the US people to a foreign government for, frankly, not a lot of money. Why? He may spend the rest of his life in prison.
How can anyone but a sociopath think that's a good trade?
That’s simply not true.
Do you have numbers to back that up?
They don't need to imagine, they see it clearly first-hand every day and continue to be disgusted century after century.
That's one of the things that guides normal humanity to be the opposite of amoral sociopathic inhumanity.