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Comment by analog31 | Hacker News Reader

The Republicans successfully turned economic issues into social ones. Previously, immigrants were stealing our jobs. Now they're stealing our cats.

The three pillars of the Republican party were conservatism, religion, and race. I'm not saying every R is concerned about all 3 of these, but that they couldn't win elections without all 3 of them. Over the past 50 years, traditional conservatism has been hard pressed to explain itself to the working class in light of the rising prosperity of liberal democracies, and has become further detached from reality. People are becoming less religious, and more racially diverse. I think the R's realized that they were running out of runway, and also figured out how to exploit nearly 100% dominance over the "new" media.

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Not to mention a _huge_ [1][2] increase in wealth inequality over the past 30 years as well.

Instead of progressive taxes and taxing the rich more, you end up instead with tax _breaks_ for the richest and regressive taxes instead (tariffs, which are effectively a national sales tax).

I guess the current tactic is to distract people with "those terrible immigrants are at fault" and DOGE and constant policy changes.

[1]: https://www.pewresearch.org/social-trends/2020/01/09/trends-...

[2]: https://www.pewresearch.org/social-trends/2020/01/09/trends-...

The usual HN response to wealth inequality is "why do you care how much they have?" The answer is, of course, that money is power and the power that many of the wealthy are exercising is not to the benefit of most people.

You don't even need to think about money as power, you can just think about money as money. There's a far simpler way to think about wealth inequality. If you believe it's a problem, by definition the people holding the wealth are the cause of the problem. This isn't some social or philosophical construct - it's just basic deduction.

So quite literally, the wealthy holding the money means less money to go around to everyone else. The more they hold themselves, the more is withheld from everyone else. You can have debates about wealth distribution endlessly because it's subjective and complicated, but you can't argue that the wealthy getting richer is good for anyone except the wealthy. Trickle-down-economics has already been established as propaganda at this point.

I understand that wealth is not static in the world and it's possible to create wealth for everyone, but my point is money hoarding is definitionally the cause of wealth inequality.

I get what you say -- hoarded wealth is essentially idle. But I think there's more to it. The people who hold that wealth prefer to live in one country, and have inflicted themselves on the governance of that country.

> hoarded wealth is essentially idle

This is, I think, a blind spot for most people. Hoarded wealth isn't idle at all.

At the _very least_ it accrues interest (and compounds!) and grows!

Indeed, and if it's hoarded in the form of land, then the land definitely accrues political power.

> I get what you say -- hoarded wealth is essentially idle.

I'm not talking at all about wealth being idle in my previous comment. My point is entirely that the more money the rich have, the less money the poor have.

What you're bringing up is how the wealthy use their money to change their political environment to benefit themselves. This is also a problem, but is parallel to the point I was making.

> My point is entirely that the more money the rich have, the less money the poor have.

I'm curious how Google/Microsoft/Apple/Amazon/Netflix/etc have transferred money out of your bank account to their hoards.

Personally, I've transferred money to them, but only for things I wanted to buy from them and thought was worth the money.

You are replying to every single comment - you seem really upset about this. I never said anything was stolen from me. I said wealth inequality is the result of rich people holding money, because by definition there can be no wealth inequality without rich people. It's an objective statement and you're projecting so much political vitriol onto it.

I'm not upset at all. My question to you was a fair one.

You did say "less" money for the poor. That implies the wealth is being transferred from them.

> by definition there can be no wealth inequality without rich people

That doesn't all mean they are "holding" money. Money is not the same thing as wealth. Personally, I don't have any money other than pocket change.

> you're projecting so much political vitriol onto it.

Am I? I thought my statements were objective facts, and not at all political.

> That doesn't all mean they are "holding" money. Money is not the same thing as wealth. Personally, I don't have any money other than pocket change.

I'm using money and wealth interchangeably here because there is no meaningful distinction in this context. I cannot take you seriously when you keep bringing up irrelevant things. It's obvious you don't understand my point. And I've had enough arguments with you on this site over the years to know it's a waste of my time to engage with you more than I already have.

The dictionary defines "hoard" as: "a stock or store of money or valued objects, typically one that is secret or carefully guarded."

An investment in a company is not a "hoard".

You're free to make up your own definitions of words, but it doesn't work to expect others to adhere to them.

> it's a waste of my time to engage with you

I'm definitely the wrong person if you want to only engage with people who agree with you.

The wealthy aren't exactly hoarding the money under their bed. They buy treasuries and bonds so the money get used elsewhere in the economy to do something.

The federal government's credit card is funded by the saving of the rich, which allowed us to run up huge debt.

The vast inequality you seen is the result of undertaxation of monopolies and deliberate granting of monopolies. Disney wouldn't be as big if copyright actually expire some 20 years after the fact.

Anyway, the billionaire are less relevant to you than the average homeowner next door. They are the one who hold further infill development hostage and are inimical to anyone who would depress the value of their home.

High housing prices are the result of a housing shortage. The shortage is the result of government zoning, regulation, and slow-walking building permits.

(Apparently California has only issued 4 permits so far for people to rebuild after the fires.)

Which worth comparing to Texas where building is allowed.

Texas's population has also gone from ~20M in 2000 to ~30M today.

With no zoning a place like Houston has shown what can be done by encouraging building.

Austin recently has also done well with allowing more building.

Luxuries are cheap and getting cheaper. Basic necessities like housing are increasingly expensive. That's where most of the inequality is being felt by people.

That's why we're in this predicament.

> the wealthy holding the money means less money to go around to everyone else

Wealthy entrepreneuers created their wealth, it was not transferred to them. It does not reduce the amount of money elsewhere.

The wealthy do not "hoard" wealth, either. They invest it. All of it. Even checking accounts are not hoarded wealth, because the money you put in it is loaned out by the bank (less the reserve requirements).

This is largely debatable and hard to measure. The thing about creation is that it's not black or white, it's gray.

Everything relies on thousands of other things. Products and services are huge graphs that nobody truly understands and that span hundreds of years. How much is created, and how much is reused? Hard to say.

At least some of the money is taken via exploitation. For example, if you opt to outsource product X to some third-world country and you drop labor cost 10%, and that in turn grows your company, you did not "create" that growth. You systematically stole it.

Another example we see a lot today is cutting quality. A lot of goods today are produced more efficiently, but not as much as you may think, because some of the productivity gains is simply pseudo-monopolies using their market dominance to cut quality without recourse. It's just human nature that we can't perceive a, say, 1% cut in quality. But if you cut 1% every year for half a century, then congratulations, you "created" a bunch of wealth. But you didn't actually create anything.

Offering jobs to people who don't have jobs is not theft, and a voluntary exchange is not theft, either.

Pointing a gun at someone to get them to work is theft. Putting your name on a contract or your brains is also theft.

Choice isn't binary, it's a continuous distribution. There's not "free choice" and then "gun to head".

Work, especially for vulnerable, exploited populations, is not voluntary. Particularly when we talk about pseudo-slavery tactics used on migrant workers or other vulnerable populations.

There's a reason companies will often progressively move down to poorer, more vulnerable populations for their labor. Those people are much easier to exploit. We even see this in the US, to an extent. Tyson recently had a debacle where they threatened their (knowingly undocumented) workers with ICE if they attempted to unionize. To call this "voluntary" is willfully ignorant, at best.

It's remarkable that even on HN so many people believe that economics is a zero sum game.

It obviously to a non-insignificant extent. Only the proportion is debatable.

Some items absolutely are zero sum - anything that is in short supply with a high demand becomes unobtainable for anyone who isn't rich.

Some things that are effectively out of reach for at least half of everyone:

  Mansions and Luxury Condos in desirable locations
  Private Jet
  Private Island
  The best quality food
  2021 Ferrari 812 GTS
  The best legal advice
  A favor from a US Senator

These things are effectively zero-sum, only a limited number of people can have them and we can't expand the supply very much (or intentionally don't because that would hurt their exclusivity value).

If the wealthy held their wealth in money then there would be no problem. The problem arises because the wealthy hold their wealth in assets, the most productive of which become hoarded in fewer and fewer silos. Since the assets are desireable and increasing in scarcity their asking price increases. Since this price is paid in money, the value of money falls. This would be fine except that most normal people do hold most of their wealth in money so this reduction in buying power makes them poorer.

This split is particularly difficult to address because money is easy to tax (redistribute) while assets that may or may not be for sale at some arbitrary asking price are a lot harder to break up in this way.

Ultimately, to attempt to extract and redistribute this sort of ethereal wealth requires unpopular adjustments to long-held values of personal freedom and ownership that make the whole system possible in the first place.

The problem may in fact be insoluble sustainably. Most of human history provides examples of extreme wealth inequality.

Particularly after Citizens United, money has squelched voter influence in favor of a few large donors. People don't seem to realize however imperfect the choices are, actively voting against this agenda instead of giving up and hoping it'll somehow work out will fail.

Kamala outspent Trump by about 3:1 in the last election. Money didn't buy it.

Are you sure? We certainly didn't end up with Bernie on the Democrat ballot.

Just because team-R beat team-D doesn't mean both weren't being driven by huge amounts of special interest money from the wealthiest individuals.

I doubt Bernie is electable no matter how much he spends.

Elon buying twitter and changing the algorithm to support him probably isn't included in this calculation

Ironically, Elon tried to back out of the deal and the liberals forced him to buy it.

Take into account that CNN, MSNBC, ABC, NBC, NYT, NPR, etc., were all solidly in the Democrat camp, the Democrats didn't need to fund them.

One easy thing you can do on HN is replace "they" with "we" in a lot of those instances.

HN has a lot of good people. HN also has a lot of people who consider themselves supporters of meritocracy and see everything they've achieved as solely a result of their own hard work. HN also has a lot of people with absolutely mind blowing levels of wealth. HN also has a lot of people who, saying it as kindly as I can, just do not know what life is like for a normal person.

More than 30 years, it's closer to 50.

I actually wonder how much of the stagflation in the 1970s was caused by tax cuts for the rich. It would make sense, if you think about it. If rich people spent more on luxuries, then the free market would naturally move resources away from creating necessities. This results in a shortage of necessities, resulting in higher prices. There's no increase in productivity caused by just shuffling jobs around, so the economy would be relatively stagnant.

I'm not saying the oil crisis wasn't a major factor, but I'm curious how much of it was from voodoo economics...

> If rich people spent more on luxuries, then the free market would naturally move resources away from creating necessities. This results in a shortage of necessities, resulting in higher prices. There's no increase in productivity caused by just shuffling jobs around, so the economy would be relatively stagnant

I agree. And further, the whole concept of "trickle down economics" always seemed like a propaganda scam to me -- I mean, how much _do_ the exceptionally wealthy even spend when going about their daily lives? And how much of that just ends up going to other super wealthy people anyway (private jets, yachts, fashion, etc)?

It isn't like they are buying millions of dollars worth of locally sourced items in their communities every day of the year.

> how much _do_ the exceptionally wealthy even spend when going about their daily lives?

They invest in companies. Take a look at the annual report for any public corporation. The category of "Expenses" is what gets spent on plant, equipment, salaries, interest, etc.

Roughly speaking, "Profit" is Revenue minus Expenses. Profit accrues to the investors. If the Profit turns out to be less than zero, that loss is attached to the investors.

> It isn't like they are buying millions of dollars worth of locally sourced items in their communities every day of the year.

The companies they invest in do.

You could replace one rich guy with a larger number of average Joe shareholders and still obtain the same results (or better, since average Joes usually tend not to be ego-tripping activist investors).

>>> If the Profit turns out to be less than zero, that loss is attached to the investors.

Within limits. "Limitation of liability" circumscribes the investors' exposure to loss. The loss may also be attached to creditors, workers, and the general public.

You spend less, proportionally, of your income the richer you are. Economic activity scales inversely with wealth.

Poor people spend close to 100% of their income on consumption, middle class people a little less, and up into the billionaires we're looking at less than 1%.

They "move money" in other ways, but I think the key here is that those other ways are just necessarily less economically stimulating.

What tax cuts for the rich were there in the 1970s? The tax cuts came in the 80's. There were also Nixon's price controls, which Carter continued, which were another disaster.

Inflation results from deficit spending.

Inflation results from more dollars chasing fewer goods.

That can come from deficit spending, or that can come from tax cuts freeing cash for people to spend.

> or that can come from tax cuts freeing cash for people to spend

Tax cuts do free cash to be spent that otherwise would be spent by the government. As it gets spent either way, it is not inflationary.

Inflation is the result of an increase in the supply of money relative to the value of goods and services in the economy.

Oh so the massive increases in the cost of food had nothing to do with the energy price spike post Ukraine invasion in Europe?

Interesting.

You can have price increases without inflation.

For example, let's say the only things you spend money on are eggs and gas. One day, the price of eggs goes up. You buy eggs, now you have less money to spend on gas. The demand for gas goes down, and so does its price.

I.e. a rise in the price of eggs does not result in an increase in your income to cover it.

But with money creation, there is more money chasing the same goods, so your income goes up along with the prices.

It's the Law of Supply and Demand in action.

But... When the cost of gas goes up, so does the cost of almost everything else because the trucks and trains and planes that deliver everything all use gas of some kind.

Supply and Demand still applies. If you have less money, demand drops, and so do prices.

Not for food or energy. Those are pretty necessary and it's hard for people to consume less.

You are making the assumption the government will spend the extra revenue.

That depends on their fiscal behavior and obligations.

> You are making the assumption the government will spend the extra revenue.

Yes, I am. They always do. Federal, state and local.

> "...more racially diverse..."

Sorry to burst your bubble but the racially diverse shifted towards voting for Trump in the 2024 election: https://navigatorresearch.org/2024-post-election-survey-raci...

These two things could be true at the same time. A shift of some groups towards Trump, and the support of racism as an issue to motivate "base" voters.

The shift couldn't have been huge, given that the election was won on the slimmest of margins.

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