Nine households control 15% of wealth in Silicon Valley as inequality widens | Hacker News Reader

Nine households control 15% of wealth in Silicon Valley as inequality widens

theguardian.com

88 pointsc420136 comments

Adding up all of the wealth in a small region and then calculating wealth inequality against a small number of households makes for some triggering headlines, but it’s not a very useful metric for anything in the real world.

A though exercise: If these 9 households moved to another city, the wealth inequality would improve. But what has actually been accomplished? Tax revenues would actually drop.

A lot of these perspectives cater to an idea that wealth is zero sum. If a small number of households have a lot of wealth, some people assume it must have been amassed by taking it from the other households. The more people believe in zero-sum thinking, the more egregious this feels.

> A lot of these perspectives cater to an idea that wealth is zero sum.

ofcourse its zero sum. There are only so many natural resources to exploit. Zuckerberg owns like half of lake tahoe and Hawaii.

if it were zero sum then how come middle class people nowadays live better lives than kings 500 years ago?

I'd rather have Versailles than my current apartment. I think all standard pro-billionaire talking points have been exhausted in these comments.

so you want to be rich and are mad that you're not?

Oh, he was wrong, now all pro-billionaire talking points have been exhausted.

What a hideous mindset. This attitude is the origin of the ruin of civilization.

What middle class person has thousands of literal servants who will spend every waking hour serving, feeding, cleaning, tailoring, cooking and creating for them in their giant, country-spanning estates?

How many middle class people have the God-given divine right to rule and demand the sons of every nobleman to fight to keep and expand their power?

How many middle class people literally own a country and can dictate what happens in it from the top down? How many vineyards do middle class people own? How many garden hermits[1] do they keep on their estates simply for their ambience and kitsch?

[1] https://en.wikipedia.org/wiki/Garden_hermit

you don't need that many servants when you have businesses that offer the same services and you can afford them. Or you think middle class people can't afford travelling, laundry services, food delivery, etc.

The second thing you're referring to is power. Power I admit can be zero sum but most people are not ambitious in that way, they just want material wealth not political power.

Sorry, using DoorDash to order fast food is not the same thing as having a team of the country's best chefs cooking every meal for you in your castle using ingredients your farmers hand-picked on your own vast swathes of premium farmland. Sounds healthier, too.

Similarly, spending $10 at McDonald's is not the same thing as having teams of servants tending to your every whim every waking moment until you die.

If you can't see that clear difference, I don't think you're approaching this in good faith. You shouldn't have to stretch the truth this much to make your point if it's actually true and you know it.

Let’s compare my quality of life to a king 500 years ago.

I have air conditioning.

I have running water and a toilet.

I have antibiotics. And all sorts of other medicine that actually works.

When I have to get an operation done I can go under anesthesia rather than it being literal torture. And I won’t be killed by an infection resulting from the tiniest cut.

I have literally endless entertainment. More than I can ever consume in a lifetime.

I have access to just about any piece of information that has ever existed and been made public.

I don’t have to worry about being killed by an uprising.

I can go on.

> I have air conditioning.

I find Spanish castels from 1500-1600 to be pleasant enough temperature wise even when it's +35C outside.

You act like having teams of servants is a good thing. It isn't. The best possible outcome is you don't need teams of servants and you can still have gobs of convenience. Which is exactly what the modern lifestyle has given us.

You're comparing a ten dollar meal from McDonald's to a cooked meal by a team of professionals. Your comparison completely ignores the fact that in modern society you can absolutely have a meal cooked by a team of professionals or you can have McDonald's and you can decide moment to moment what you want, and all of it requires less outlay from you than it did 500 years ago, so it's available to practically everyone, not just the most wealthy.

What king 500 years could do that? (Well okay, maybe Suleiman the Magnificent, but that about exhausts the list.)

500 years ago puts us in 1525, which is still in the transitional period of Medieval kingdoms becoming actual states. The kind of absolutism you're thinking about is still about 100-150 years away from coming to fruition. Medieval kings were almost entirely reliant on their vassals to be able to marshal any power whatsoever: if an important vassal decides he doesn't want to fight in the king's war, well, the king can't exactly force him (see e.g. the Burgundians in the Hundred Years' War--and this involves the most cohesive European monarchy!). You're starting to see efforts by 1525 to reduce the power of nobles to act independent of their liege, but they're certainly not there yet.

But keep in mind the other luxuries people today enjoy that the kings of 500 years ago can't. The ability to see all of your children survive until, well, your own death. The ability to eat, say, fresh strawberries in the height of winter. The ability to know your wife isn't going to die giving birth to another kid. Hell, pretty good odds your bed is larger than a king's bed from 500 years ago, and more comfortable too.

Nobody is arguing that it is zero-sum across time. It is zero sum across space (i.e. across people).

Middle class people are forced to work at jobs doing what some boss tells them to do instead of what they like with the majority of their waking hours. In that regard, they live lives far from as pleasurable as those of kings.

It's not zero sum if we regulate these resources. The sun provides low entropy which we can convert to an increasing stockpile of wealth. The problem is how we've decided to distribute it, and whether we can successfully transition to mining our local solar system.

> It's not zero sum if we regulate these resources.

That would be good for billionaires because they can be the only ones that have access to those resources. See what is happening in lake tahoe.

Yes, proper regulation benefits everyone. You're hinting at the idea that "regulation" will turn into regulatory capture. I share that fear, but at that point we're not talking about real regulation, just political theatre.

Its not just mark. Most of lake tahoe properties stay empty most of the year. They loudly regulate any new development. Thats happening all over country, even in my middle class neighborhood. Not sure what kind of regulation in this case would benefit everyone.

My comment was about regulating the consumption of natural resources. Property allocation is a whole other political beast.

The total sum of all natural resources has yet to be discovered. We were supposed to hit peak oil in what, the 1990's? Trees are on a dramatic decline, but they still exist. No one can correctly or meaningfully count the amount of natural resources left in total existence. And when there's scarcity, another solution tends to emerge as substitute.

As such, as parent stated, it's not a zero sum game. Zero sum assumes you can define the end state.

That being said, whether or not it's zero-sum is meaningless, and I don't take issue with arguing against the parent. Ultimately, the wealth-gap is widening to detrimental effect. The middle class is being divided into haves and have nots.

Whether you believe this is a problem, that's probably another type of discussion.

> And when there's scarcity, another solution tends to emerge as substitute.

then why do we so much conservation and create all sorts of laws around it ?

> We were supposed to hit peak oil in what, the 1990's?

Originally the late 60's, actually, according to Wikipedia.

The failure of Malthusian catastrophes to occur despite centuries of prediction hasn't dampened enthusiasm for predicting them to occur in the near future.

Malthusian catastrophe occurred in Bangladesh, India and Pakistan.

The failure of Malthusian catastrophes is largely down to population growth stagnating, not because infinite growth was ever sustainable.

It’s not zero sum but that doesn’t mean the very wealthy aren’t taking substantial more of the pie’s growth as its grows, if not nearly all of it.

All that matters is what you can purchase and what lifestyle you can afford. Despite living in supposed Dickensian-levels of inequality there is no better time in world history to be alive, by a long shot, and our poorest have it better than ever before

That's not all that matters, although it is important.

Excessive concentration of wealth has destructive consequences.

"destructive consequences."

In the context of just Silicon Valley, what are they?

Did you just come out of a coma?

The destructive and unchecked accumulation of wealth in SV is what allowed the creation of monstrosities such as the gig economy and massive surveillance.

At the present moment in time it even allowed some tech oligarchs to directly influence elections in their favor, gaining access direct access to the high levels of government to have nugde government actions inntheir favor, curb regulatory interference that might put checks in their companies, etc.

I am presuming younasked from a position of ignorance rather than finding all this desirable somehow.

When I said "in the context of Silicon Valley", I meant the geographical region not "what are the bad things tech has done".

Most SV politicos that drive living conditions in the valley don't take PAC money and aren't affected by Billionaires. There's a housing shortage and a cost of living crisis anyway (example: no matter how much you pay gig economy workers, they are not going to afford a home in the valley).

The issues you mentioned are because of Citizens United - a federal issue w/ consequences all over the country (not just SV).

So the answer is to concentrate the wealth from these few to the governemnt?

A distinction without a difference. You don't seem to understand that moving something from point A to point A changes nothing.

The answer is to redistribute the excessive wealth to the population, be it theough improvements in public infrastructure, be it through providing better and cheaper access to things such as healthcare and education, be it through more direct direct means (e.g.: welfare).

Yes, this is done through the government. While the government as an institution should be scrutinized and not necessarily get blind faith, it at least has the pretense of looking after the needs of the population.

Apples and oranges. Suffering now is not the same as suffering then - that doesn't mean it's not suffering.

This is the same dishonest line of reasoning as "there are children starving in Africa". That doesn't give the wealthy the right to take food from my children for themselves (indirectly speaking).

But you know that. The point is not to make an honest argument, but to oppress. I'm desperate for us to evolve past the point of making these immoral arguments against innocent people, pushing and pushing and pushing until something catastrophically breaks.

The capitalist system has brought all of humanity higher than ever dreamed of by the wealthiest kings in centuries past. People objectively live in more comfort with better health than ever before. Philosophically, if someone gains their wealth from people voluntarily giving them money in the free market, this is the most noble possible way to earn a fortune there is, as they earned it by providing something other people wanted.

The most despicable wealthy are those that earned it via government coercion - they literally robbed their fellow citizens

> Philosophically, if someone gains their wealth from people voluntarily giving them money in the free market, this is the most noble possible way to earn a fortune there is

People can be manipulated so that they give you money "voluntarily", but I wouldn't call that noble. Probably trillions of dollars are spent trying to manipulate people in various ways to try to convince them to give their money to the wealthy. Some of the most brilliant minds of humanity are working on how to use human psychology and technology to get people to do what they want. When an individual is up against that, I wouldn't call it entirely voluntary.

> The capitalist system has brought all of humanity higher than ever dreamed of by the wealthiest kings in centuries past.

All of humanity? No, millions still die of hunger. That's because their needs are invisible in a capitalist system, while the wants of those with wealth get the attention of everyone.

You are attacking the concept of marketing / advertising as a fundamental evil, and the idea that starving people existing negates the entire system we have which has proven to be successful. I would love to see a successful country that is not capitalist at its core

> You are attacking the concept of marketing / advertising as a fundamental evil

It is. Informing people about solutions to their problems is good, but advertising as it exists today is nothing more than manipulation in most cases.

> the idea that starving people existing negates the entire system we have which has proven to be successful

You said that capitalism has lifted all of humanity, but that is clearly not the case, not even in countries considered capitalist.

> You said that capitalism has lifted all of humanity, but that is clearly not the case, not even in countries considered capitalist.

Yes, it absolutely has, and there is no example you can provide of a capitalist country providing a worse life than a non-capitalist country

If people are still dying of hunger and preventable diseases in capitalist countries, then it has not lifted all of humanity. I wasn't saying some other system is doing better than capitalism, just that capitalism has not succeeded in bringing all of humanity out of absolute poverty.

Anyway, just because capitalism is the best we've come up with so far doesn't mean we can't do better. Would you look at the fastest car today and say "there's no example of a faster car you can provide, therefore this is the fastest car there can ever be". No, we can do better, especially with the technology we now have.

Capitalism is not a designed system, it is an emergent phenomena. Even in the most restrictive, communist societies (North Korea) the black market is the primary way the common people don’t starve. As they accumulate wealth they continue to invest in their black market enterprises.

There is no alternative to letting people trade, which results in successful traders accumulating more than others. That’s it. There is no other system because it goes against human nature

Markets != capitalism. By limiting what can be owned and for what reason, we could get rid of capitalism without completely getting rid of markets. It'd be quite easy to prevent private ownership of land or large businesses without black markets for those things forming.

Your solution is to have the government restrict freedom at gunpoint. A solution with a long history of examples and attempts, of total failure

Capitalism relies on a government enforcing its rules just as much as any other system. How do you think someone can own businesses, buildings and large swathes of land? Because if someone tries to claim them as their own, the government will come and restrict their freedom to do so. We also quite successfully restrict ownership of people these days.

Government by definition (at least through Hobbes' Leviathan) is the restriction of some freedoms through the monopoly of violence.

It restricts your freedom of robbing others, of killing people, of not abiding by a contract, there are many "freedoms" you don't have that are necessary for society to function.

As the other comment mentioned, markets != capitalism, capitalism is a specific system to exploit markets but it doesn't mean it's the best way that will ever be found to provide incentives to produce what society wants or needs.

>> It'd be quite easy to prevent private ownership of land or large businesses without black markets for those things forming.

Quite impossible actually.

It is incredibly easy. All the state needs to do is stop recognizing such property claims, and, therefore, stop using its monopoly on use of force to protect them. Capitalism doesn't exist outside of a framework of property rights that allows for accumulation of capital, which requires a legal system to enforce it. Remove that legal system, and the rest collapses.

People have always traded, since the earliest pre-human artifacts. Trade makes both sides wealthier. Outlaw property rights and people will use other mechanisms to defend their property.

What the parent comment says is not to outlaw property rights absolutely, read the comment again "private ownership of land or large businesses", it's a very specific subset of ownership.

Trading and markets are not the problem. Unbounded accumulation of capital is. Capitalism is actually anti-free-trade and anti-free-markets because it creates a positive feedback loop where the more capital you have, the more economic rent you can extract from others, which can then be used to grow the capital. At the end of that loop is a degenerate market dominated by a single monopoly or a few oligopolies, not free in any meaningful sense.

Therefore, if society wants free trade and free markets, it needs to prevent this. And the easiest way to do so is by making unbounded capital accumulation impossible, by refusing to acknowledge it as legitimate property right past a certain point, and thus withholding society's protections for it. It doesn't mean that all property rights are gone.

There is no such thing as "rent extraction" in a free market. I am gaining capital because I am serving others well, so they voluntarily give me their money. Trade is not zero-sum, we are both better. Capital I accumulate is reinvested, or spent on things I want. There is no problem with capital accumulation.

You have come to the exactly incorrect conclusions

There's no free market with oligopolies.

No it's impossible, because if the state steps down, other criminal associations will take it's role. You are effectively saying, if we delete mentions of gravity in physics textbooks, it will cease to exit.

> You are attacking the concept of marketing / advertising as a fundamental evil

It is. It's exploitation of the human mind, like a drug. It exists to hit the right triggers to open the gates of a person's decision making.

It's like a backdoor. Except, not really. Because the human mind is much easier to exploit than a computer.

We can do it very obviously, maybe with nicotine. But we don't even need substances. Just some bright lights and a bar you pull is enough to get people to drain their entire savings. You can even tell them "this doesn't work, you won't win" - it doesn't actually affect the exploit, because the exploit is occurring on a physiological, survival level, and logic is at a higher level than that. It's like trying to stop an active rootkit with Windows Defender.

Advertisement is gambling, but normalized. The goal is to develop an exploit to compel humans to work against their interests, to actively harm themselves in hopes of something they require.

It's typically simple things like joy or love. They might appeal to the innate desire for socialization, the innate need to be recognized and respected.

But, actually, you don't even need that. Even just exposing a brand image, over and over again, with no messaging creates an exploit. Now, they are primed to buy from you as opposed to competitors. Not based on logic, or even emotion - no, something much more intrinsic, much more fundamental to how neurons operate. Pattern recognition.

The exploit is so effective and deep-seated that you cannot even be aware if it has occurred, nor can you undo it. Some people believe the point of advertising is to get people to buy things. No, not at all. The point of advertising is for people to buy things all on their own, and make them believe it was done on their own accord. That's the golden goose. Any idiot can hold a gun to someone's head. But true manipulation doesn't require a gun.

"The kids aren't alright."

50,000 people died by suicide in the USA in 2023. 12.8 million thought about it. 3.7 made a plan for it. 1.5 million attempted it. https://www.cdc.gov/suicide/facts/data.html

105,000 people died by overdose in the USA in 2023. https://nida.nih.gov/research-topics/trends-statistics/overd...

In 2023 the average daily incarceration population in the USA was 664,000. https://bjs.ojp.gov/library/publications/jail-inmates-2023-s...

Average daily homeless population for the USA in 2023 was 653,000. https://nlihc.org/resource/hud-releases-2023-annual-homeless...

In 2023 only 86% of US households were food secure. https://www.ers.usda.gov/topics/food-nutrition-assistance/fo...

The majority of US bankruptcies (58.5%) “very much” or “somewhat” agreed that medical expenses contributed, and 44.3% cited illness-related work loss; 66.5% cited at least one of these two medical contributors—equivalent to about 530,000 medical bankruptcies annually. https://pmc.ncbi.nlm.nih.gov/articles/PMC6366487/

American police kill more people than any other country at 1100 people a year. https://www.prisonpolicy.org/blog/2020/06/05/policekillings/

Everything you’ve said is true, of course.

I’d rather live in a conclave of billionaires, under my current standard of living, than be the richest man in the country living under the standards of 40 years ago.

How far would you be willing to take this? Would it still be fine to you if those billionaires became trillionaires? Would it still be fine if those people had the wealth and technology to live forever and travel the stars, while you're still living with your current standard of living? Would it be ok when your life to those wealthy people looks the same as the life of a rat does to you?

The argument is even more compelling if you keep going: Should we allow septillionaires? Someone with $1e24 could give $1 trillion to every person on the planet every year for 100 years and still have 99.99% of his money left. How much power and influence over the world would these people have, while the rest have comparatively close to zero? I think we all agree that wouldn't work for a functioning society.

I’d be fine with trillionaires. How rich somebody else is doesn’t bother me.

Now, if they could live forever with that wealth, I’d probably change my mind. But that’s just fiction. Rich people die, some of them younger than I am.

One rather sobering thing is to search both mean and median net worth for your age. For mine, mean is over 4x the median.

You'd expect some divergence, but not nearly that much.

You're looking at this backwards. It's already an affluent area and even still wealth is so consolidated.

What is the point of the thought experiment? No one is asking them to _move_.

>The more people believe in zero-sum thinking

It is zero-sum. That's the correct way of thinking.

It may not be absolutely zero-sum, but it is effectively zero-sum. As in: The effects, problems, and solutions - in practice - are the same as is if it were zero-sum.

Can it be a negative-sum - the bigger inequality, the smaller the total?

While they are perhaps paying large amounts of local taxes, are these taxes in the same proportion as those of lesser wealth and are these taxes in proportion to their influence? For most wealthy people, taxes are an afterthought given the tax breaks they have access to.

The point is that SV is packed to the brim with very wealthy people, so this is a demonstration of the scale of the wealth inequality, which is something people tend to have difficulty wrapping their heads around.

This is not unique to SV. This is happening world over. The wealthier are buying more assets, the middle and lower classes are left paying rent to the wealthy landowners. "Gary's Economics" has tons of material on wealth inequality and its impacts.

None of those top families even really live in the bay area. They attend meetings here sure, but their real homes are on islands/compounds.

More approachable writeup / primary source:

https://www.sjsu.edu/hri/policy-projects/svpi/index.php

Why not be bold and name those nine households? I think the public deserves to know who in their community is hoarding all of the wealth.

Do billionaires affect the area they live in much? I imagine they'd mostly just have a compound in an already rich area, and not interact with the general area much. And then be travelling to other houses of theirs or for business frequently?

>Do billionaires affect the area they live in much?

Not by their consumer spending or how they live but given that SV billionaires have increasingly become politically activist with their vast sums of money, almost certainly.

They have actually become less politically activist with their money. Of the 9 families in previous election cycles

Zuck - wanted to run for President as a Democrat

Laurene Powell - huge left wing donor

Google Founders - huge left wing donors

Eric Schmidt - led digital for Clinton, huge Obama backer

Ellison is the only right wing one of the group, the rest have just stepped back from politics, spending less (except Laurene)

Not to mention those just below the cutoff like Dustin Moskovitz.

> While the data does not name individuals, it is not hard to find the list of billionaires who call the region home: Meta CEO Mark Zuckerberg and businesswoman and philanthropist Laurene Powell Jobs in Palo Alto, Google co-founders Larry Page and Sergey Brin, and Nvidia CEO Jensen Huang in Los Altos, former Google CEO Eric Schmidt, WhatsApp founder Jan Koum and financier George Roberts in Atherton, and Ubiquiti Networks founder Robert Pera in San Jose, are the richest nine in the two counties, according to the group’s analysis of a Forbes list.

Source: https://www.mercurynews.com/2025/03/06/wealthiest-silicon-va...

https://archive.is/KpqWc

I know it's not the point of this important article. But I had no idea about Robert Pera: https://en.wikipedia.org/wiki/Robert_Pera - kind of inspiring. Only millennial on the list that is not Zuck. And not gon' lie my instagram was similar to https://www.instagram.com/__rjp__/ for a while - seems like a semi-regular selfie with dog in car type of person. Did better financially though than most lol.

What a disappointment that this “Silicon Valley Pain Index”—where the pain consists of things like high rents and homelessness—is headlined with an irrelevant scapegoat of 9 billionaires. The 9 billionaires named in another comment (https://news.ycombinator.com/item?id=44641525) do not own the vast majority of residential zoned land and are not active in land use politics as far as I know. It’s the few hundred thousand millionaires who use regulatory capture (zoning) to prevent abundant multifamily housing.

You can hate billionaires for other reasons, but urban land use is mostly a problem of your own neighbors who vote, not some tiny minority of super-rich.

> Yet, no cities in Silicon Valley have raised the minimum wage in the past three years.

what?

how is moving minimum wage a dollar going to help someone tackle the $136,500 necessary to rent responsibly?

just seems like an odd thing to add. they’re still going to be commuting an hour like everyone else

Didn't they just increase minimum wage this year? https://sanjosespotlight.com/silicon-valley-san-jose-califor...

> Didn't they just increase minimum wage this year

Thank you for pointing out this correction and article! TIL.

> from $17.55 an hour to $17.95 come Jan. 1

> In the San Jose metropolitan area, as of earlier this year, [Living Wage Calculator estimates] about $32.87 for a single adult with no children

> Last year, the calculator estimated single adults needed to make $26.20

Elsewhere:

> The [CPI] inflation rate for the United States was 2.7% for the 12 months ending June

So, assuming the article’s figures are valid, it looks like San Jose’s minimum wage increased this year by around -1.5% (inflation-adjusted) or by around -20% (Living Wage adjusted), depending on which basis you use. If only San Jose had misread the inflation chart and mistakenly issued a one-month inflation increase rather than a one-year. Sigh.

Which households are these 9?

See: https://news.ycombinator.com/item?id=44641525

Is this just a result of a strong market since most of their “wealth” is in stocks, driving up the perceived gap and resulting in such shocking sounding stats?

I am not defending inequality but how is stock-based wealth taking away from lower income workers? Is it a taxation issue?

Does the number of billionaires impact the overall cost of living of a whole metro area? If so, how?

I don’t quite understand the comparison. Genuinely asking.

Here is the source and I’m still not sure

https://www.sjsu.edu/hri/docs/SVPI%202025%20Annual%20Report%...

Yikes. I get they're trying to push an anti-inequality agenda, but some of the statistics are only tenuously related to inequality. For instance:

>0 Number of student wellness centers in the San José Unified School District that opened in 2024, despite the growing mental health crisis in youth

>0 Number of Narcan kits stocked at San José Unified School District schools, making SJUSD the only major Bay Area school district that does not stock Narcan or train staff to administer Narcan in case of a fentanyl overdose.

What's the implication supposed to be? That if it weren't for AI tech bros, there would be student wellness centers and narcan kits?

It's obviously focused more on the agenda. They start out by saying they are inspired by the Katrina pain index--and I do have some food and shelter attributes.

However, it seems like a lot of what they worry about is the victimhood from being envious.

The implication is that if there were less wealth inequality, those with less current wealth would have more things, yes.

Things that are currently underfunded could, with the availability of more funds, be less underfunded.

Obviously it's not just the nine billionaires that are "the problem", but inequality in general.

>The implication is that if there were less wealth inequality, those with less wealth would have more things, yes.

Is it really a funding issue? The same quote mentions that other bay area school districts were somehow able to afford narcan kits.

it's that those 9 billionaires are a very small, tractable problem

That’s backwards from my approach to economics

A high gini coefficient isn’t because of someone accumulating more wealth than everyone else, its because of low velocity of money movements in the economy

Fixing the speed of money movements solves the other problems and results in more people having wealth, or access to services. Note that its not completely arbitrary money movements, its into goods and services and investments. This has to be more attractive than passively holding money and assets, which is what most risk-averse people’s entire plan is.

A lot of the compensation is in stocks, sure, but a lot of compensation is also, well, in compensation. HN users have been posting -- for years -- about salaries and cash (or cash equivalent) bonuses for starting level software engineering positions at some companies exceeding $250K annually. The salary inflation in Silicon Valley's tech fields has far outpaced both general inflation and wage increases of non-tech workers in the area, so even if you're seeing San Jose Panda Express locations paying $20/hr, it's just not closing or even maintaining the gap. (And we're setting aside how many of those sorts of positions aren't actually full-time.)

For full disclosure, when I was working in Silicon Valley as a tech writer a few years ago, I was making over $200K in salary and bonuses, no stock options. Now I'm working remotely in Florida, contracting with a "managed services" company who's placed me with a much bigger tech company (one you've definitely heard of) which uses this structure to keep salaries down, and I'm making $35/hr -- and the company only pays for benefits in the most technical sense, e.g., I can buy health insurance with pre-tax money but they don't contribute any of it, there's a 401(k) but it effectively has no corporate matching, I get 10 days of PTO a year, etc.).

The value of appreciated stocks (or other assets) still represents purchasing power, either through piecemeal sales as needed to match spending, or via asset-backed loans ("buy, borrow, die") to avoid sales entirely. This increased purchasing power drives up demand for (and therefore prices of) goods and services generally in the region.

I have the same issue as OP.

Piecemeal sales aren't affected by the total amount though? If I'm a billionaire vs a 100 Billionaire, I'm still taking out the same amounts to live and buy yachts.

Also, as far as I can tell, it's not these 9 Billionaires hoovering up housing in the valley either. They all utmost have 2-3 properties, most of the rest of the market remains unaffected by this inequality.

In this local context, Citizens United is irrelevant too, most of the state MP's and local council members are not funded by the Billionaires and do not need to kowtow to their policy preferences.

So how exactly is inequality driving the cost of living?

EDIT: I do wish someone would actually answer this question. Everytime I bring this up I get yelling (or downvotes) in response. I agree Citizens United has really changed how Billionaires are able to affect federal elections, but in these local cases like "Silicon Valley", how does inequality affect the cost of living? This is a sincere question.

Agreed, the cost of housing is the primary driver of every other increased cost in the Bay Area except for the cost of gas.

High rent means high wages, which means high costs for business, which means high prices for consumers...

States like Texas keep housing low, which means lower wages for workers and lower prices for consumers, but I don't want us to artificially impoverish people in order to achieve the goal of "affordability."

Instead we have to lower rent without lowering income as much. This would cause an explosion in average spending power and therefore a much stronger middle class.

Great right? Yes it would be, except for the landlords, real estate investors, and middle aged homeowners who will do anything and hurt almost anyone to keep the value of their properties artificially inflated to preposterous levels. Unfortunately, those are the people in charge in most cities.

Here is one explanation.

https://youtube.com/watch?v=BTlUyS-T-_4

is there a tl;dw? Based on a quick skim of the transcript it seems to be "pandemic stimulus/quantatative easing went to rich people and they bought houses with it", which seems to demonstrate a massive misunderstanding of how quantitative easing works, and ignores how housing prices crept up pre-pandemic, before any money printing happened.

It's not a great video. It's basically outrage bait for people who don't understand economics, by someone who also doesn't understand economics but uses words that sound like an economist uses them.

It’s basically Piketty’s thesis. His argument isn’t about QE directly, but wealth inequality.

Rich people have much more money than they need to live and therefore must spend their money on assets and other such things to avoid depreciation. They don’t just buy a massive house to live in, they buy properties, which drives up house prices and rent. They also finance mortgages, which enable poorer people to afford more expensive properties by putting themselves in more debt to the rich.

Extreme wealth of a few therefore has a direct impact on the price of essentials for those with less money.

QE isn’t directly responsible for house prices increasing, but the pandemic measures effectively transferred a vast amount of wealth to companies, shareholders and banks, rapidly making inequality worse.

He claims that the most equal time in British history - with the most affordable housing - was post-war 20thC, pre ‘80s neoliberalism and prices of assets have been creeping up since.

They have a disproportionate amount of influence on public policy. That leads to diverse systemic problems in society, so yes, this impacts low income workers and the overall cost of living in a city, state and country.

> but how is stock-based wealth taking away from lower income workers?

Workers could have some/more of that stock. Nearly all workers own precisely zero share of the companies they work for, despite what this tech-oriented crowd might imagine. So when a company does well and the ownership's wealth surges, the worker bees only benefit down the line if they're able to successfully lobby for a raise. Though that doesn't always work, since the factors that drive up stock values often involve things like laying off expensive workers, cutting benefits and freezing pay. Huzzah.

So it's not exactly "taking away" anything, it's more that the entire system is stacked to ensure the workers don't have anything to take away to begin with.

> Is this just a result of a strong market since most of their “wealth” is in stocks

No. This isn’t the result of The Market happening more to nine households than everybody else. That isn’t a thing that happens

The ultra rich have, effectively, left the economy. They forgo taxable income and get what amounts to interest free loans, backed on their non-income benefits, from other rich folk, then spend that to accumulate "real" assets like property.

The result is that their imaginary, untaxed, "unrealized" money is effectively realized at an opportunity cost of normal people still participating in the schmuck economy.

It's more complicated than that, of course, and it's not exactly "free money" - the house of cards could crumble - but that's the skinny of how it works.

This is why there's so much talk of taxing unrealized gains (as one example). They're trying to remove the game and force the wealthy back into the normal economy.

Stocks have changed from the prior concept of stocks. Stock buybacks used to be illegal stock manipulation. Lifestyles didn't used to be financed via loans using stock as collateral. Companies used to be managed for the long term and dividends not this quarter's impact on stock value.

The rich initiated the changes but keep going 'what who me? They're just stocks' like it's 1940 when the public calls them out for it.

Rich people have to live somewhere. Are they supposed to be isolated in some rich-only area with no poors allowed so that there's no inequality? I suppose they probably are on an even more local level. Problems with poverty in Silicon Valley are the result of government actions not the presence of rich people.

The only problem with this is that there are so few billionaires. Wealth is good. We should celebrate it, and focus on making more of it, not on resenting the people who have already done so.

I don't think people resent the people for their wealth so much as the political influence those people wield in order to preserve their wealth and power.

That is invalid framing of the issues. We know from Picketty's study of Capitalism that capital accumulates because returns on capital are higher than not and from Turchin's work on Cliodynamics that inequality drives social breakdown and chaos. One does not celebrate the creation of wealth by enabling society to crack and crumble.

>we should focus on making more wealth

Of course! Why didn't we think of that?

Congrats on getting the first sarcastic comment out of me I believe in all my time on HN. What you've said is absolutely breathtaking.

A billion in cash does not represent wealth in and of itself. If you lived in Germany in 1923, you could easily be a trillionaire, but that wouldn't do you any good.

What matters is how much cash you have relative to others, because that determines the actual purchasing power. So in a sense you're right in that the real problem isn't having billionaires, but that not everyone is one. But if everyone were one, there would be no reason to devalue the currency and drop the useless zeroes.

And, of course, the people who own those billions didn't make most of it. Some other people, who get paid salary or wages, did, with their labor. The guys who have the billions are those who collect economic rent from those who do the work.

Piketty was right? Who would’ve thought…

Wealth inequality is the primary issue in society. No one would care about immigrants, LGBTQ rights, trans athletes, or any of the other culture war issues if food, housing, transportation, and healthcare were affordable. The elites have done a fantastic job distracting everyone from the core problem afflicting society. As Piketty has shown, their increasing concentration of wealth is mathematically guaranteed and they continue to accumulate wealth while the labor class fights amongst themselves over relatively trivial matters.

>No one would care about immigrants, LGBTQ rights, trans athletes, or any of the other culture war issues if food, housing, transportation, and healthcare were affordable.

Seriously? I get why people would care less about immigration if they didn't think immigrants were stealing their jobs, but the culture war over LGBTQ rights and trans athletes hardly can be tied to some economic basis. If you spent any time interacting with conservatives you'd realize nobody is worried about LGBTQ people and trans athletes are stealing their jobs or whatever. They are worried about how LGBTQ/trans athletes are destroying the moral fabric of their society. Those concerns aren't going to evaporate just because everyone is fed and housed. If anything if they're more economically secure they'd be able to spend even more time on culture war issues.

> They are worried about how LGBTQ/trans athletes are destroying the moral fabric of their society. Those concerns aren't going to evaporate just because everyone is fed and housed. If anything if they're more economically secure they'd be able to spend even more time on culture war issues.

The mistake is assuming that these issues rise into public debate entirely through grassroots, when really its more of a consequence of the incentive structures around politics in the US. The Democratic party doesn't want to upset their donors, but they need some issue to campaign on, rally support etc. And equal rights and such is all well and good, has been successful in the past, and played well with the base. The Republican party, also doesn't want to upset their donors, and opposing the Democrats on equal rights is easy to sell to their base.

As long as the game is about moving the ball of cultural/rights issues around, the wealthy win.

I suspect the person you are responding to is suggesting that these culture war issues are merely meant to distract from the real problem, which is wealth inequality. Many of the people worried about 'moral fabric' are fine with divorce and sexual assault (and will vote for politicians with these compromised moral values) but are also concerned about trans athletes who by most metrics comprise less that .01% of all athletes.

>but are also concerned about trans athletes who by most metrics comprise less that .01% of all athletes.

What about all the recent drama over the Epstein list, which comprise less than 0.01% of Americans?

There's a difference between "I don't like this thing that you're legally allowed to do and I think it should be illegal" and "these people possibly participated in illegal activities with trafficked minors".

> What about all the recent drama over the Epstein list, which comprise less than 0.01% of Americans?

Your math is way off. Epstein's list contains compromised people on positions of power who decide policy affecting 99% of Americans plus a lot of people around the world.

Compromised politicians, scientists and media figures can be used against the interests of more than 100% of Americans if we include wars and the damage done to foreigners.

Had a family member who has said he cares NOTHING for sports - they bore him to tears - make several posts on FBook about the "horrible injustice" being perpetrated on female athletes. It's clear where he got his talking points from (Fox, etc)

The majority of conservatives believe the democrats are wasting trillions of dollars on wars, inflating debt to give trillions to their corporate and banker friends, spending billions on foreign aid, "woke" education, and fraudulent welfare. This majority gets lumped together with the anti-LGBTQ and anti-immigrant people because they believe that a lot of this wasteful spending is going towards these communities and their needs. If you removed their concerns about this spending, the remaining people who are still against LGBTQ/immigrant/welfare policies would be a small fringe group. The vast majority of conservatives do not intrinsically hate the LGBTQ/immigrant/welfare community, it's only to the extent that the former believes the latter is taking resources from them. All of this hatred stems from fear, the fear that you won't have food, shelter, or healthcare causes people to lash out at others that they perceive are causing these deficiencies.

The spin job that the elite class does is to argue that the bankers and CEOs are actually creating jobs and wealth, and the fault rests with those low-life poors/immigrants/socialists that are consuming more than they've earned. At its core, this is all about wealth and resource disparity.

Yes, you're describing a real trend that occurs in all political identities (over-perception of more extreme opinions). However, in terms of degrees:

>The vast majority of conservatives do not intrinsically hate the LGBTQ/immigrant/welfare

I consider myself anti-immigration (in some contexts). I have wonderful conservative friends. And yet, that said: It's plainly incorrect to use the term "vast majority" here. It's a believable opinion if you leave it at just immigrants, perhaps.

> The vast majority of conservatives do not intrinsically hate the LGBTQ/immigrant/welfare community, it's only to the extent that the former believes the latter is taking resources from them.

Politics is a complicated game that is easily lost over misjudged nuances. LGBTQ is different from immigrant/welfare and that's not even a nuance, the difference is fundamental.

It's the Democratic party that made LGBTQ a core and sore issue, knowing full well that it will undermine the rest of the left agenda and mislead their base to the point of blindness.

The idea is more that there wouldn't be as much fertile ground to sow fears about the "moral fabric of society" if everyone felt economically/socially secure in the first place. And that the nexus of "culture war" issues is sold as a package deal, a singular unified explanation for people's existing, vague economic anxieties (in an unabashedly conspiracy theory way).

Exactly - "God's judgment on America - bad economy, less jobs, natural disasters, etc" because they are allowing the "sinners" to "sin".

Tony Perkins (IIRC) was famous for preaching that God sends floods due to gay people specifically, until his own house flooded...

> They are worried about how LGBTQ/trans athletes are destroying the moral fabric of their society.

It's weird how they didn't seem to give one single shit about trans people until politicians and conservative media needed new boogeymen in 2015 after SCOTUS threw us a bone and couldn't use gay marriage/gay people as effective scapegoats any more.

It's almost if they where whipped up into yet another moral panic by people who have the platform and vested interest to distract them so they can be even more efficiently robbed blind economically, politically and socially.

I still don't get billionaire populism. like just fundamentally, I do not understand how Musk and Trump built this image that they're men of the people.

there are weak spots, though. Luigi Mangione became a folk hero for murdering a CEO, with a lot of support across the political spectrum. likewise, the Epstein files getting suppressed seemed to agitate just about everyone. those fault lines weren't on the woke/anti-woke axis, they were on an elite/common axis. they were also harder to safely polarize the public on.

> I do not understand how Musk and Trump built this image that they're men of the people.

They say the quiet part out loud and make enemies out of the people their followers already don't like.

One of them had a media machine that painted them as Literally Tony Stark™ for two decades, with literal Iron Man cameos, and the other promises to hurt people with blue hair a lot.

>One of them had a media machine that painted them as Literally Tony Stark™ for two decades

What "media machine"? He only bought twitter in 2022, and even if he had a PR person or two, it can hardly be considered a "media machine" any more than some SMB with one or two social media interns has a "media machine".

Did you live under a rock until 2022? I don't care who was formally on his payroll or not, the media tripped over itself to ingratiate Musk and portray him as Literally Iron Man™ to the world since the millennium.

There are still many tech people who think he's a techno-genius and fully approve of everything he does, including grokAI's hitler episodes, etc..

Sick of fake news like this. If this is cash held, then it's a news story. But if these are company valuations then holding this in the hands of few is not making the economy worse.

wealth inequality does not make the economy worse anyway. economies are always better where more wealth is created, and wealth is never created "evenly" across the population; however, the rising tide does lift all boats, that's the empirical history of successful economies.

> wealth inequality does not make the economy worse anyway. economies are always better where more wealth is created, and wealth is never created "evenly" across the population; however, the rising tide does lift all boats, that's the empirical history of successful economies.

Yes, I'm sure that once all of the wealth is held by a tiny fraction of the elites, they will successfully centrally plan the whole economy for maximum efficiency.

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