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To give backing i’m from Australia which has ~2.5x the median wealth per capita of US citizens but a lower average wealth. This shows through in the wealth of a typical citizen. Less homelessness, better living standards (hdi in australia is higher) etc.

Compare sorting by median vs average to get a sense of the issue; https://en.wikipedia.org/wiki/List_of_countries_by_wealth_pe...

This is a recent development where the median wealth of citizens in progressively taxes nations has quickly overtaken the median wealth of USA citizens.

All it takes is tax on the extremely wealthy and lessening taxes on the middle class… seems obvious right? Yet things gave consistently been going the other way for along time in the USA.

I think by the time the wealthy realize they're setting themselves up for the local equivalent of the French Revolution it will be a bit late. It's a really bad idea to create a large number of people with absolutely nothing to lose.

They already know, and do not care. Their plan is quite literally to retreat into bunkers with shock collars enforcing the loyalty of their guards.

The richest of the rich have purchased islands where they can hole up.

Stripped of their infinite freedom out here to hide in a bunker? No chance

The bunkers are in case of nuclear war or serious pandemics. Absolutely worst case last resort scenario, not just "oh I don't care if I end up there"

Moreover when you acting absolutely relentlessly like certain car maker.

People usually change their behavior after some pretty horrific events. So I would predict something like that in future. For both Europe and US too.

I suspect the wealthy think they can shield themselves by exerting control over mass media, news outlets, the press, and domestic surveillance, all amplified by AI.

If all that fails, they have their underground bunkers on faraway islands and/or backup citizenships.

> I suspect the wealthy think they can shield themselves by exerting control over

Agreed and I think this is a result of a naive belief that we humans tend to have that controlling thoughts can control reality. Politicians still live by this belief but eventually reality and lived experience does catch up. By that time all trust is long gone.

Assuming that they are able to fully replace the workforce, and that technocracy is fully realized, the majority stakeholders of these corporations will rely on corporations akin to palantir & anduril for private security.

That’s what the bunkers in New Zealand are for, but if AI keeps its pace, it might not be enough anyway.

> All it takes is tax on the extremely wealthy and lessening taxes on the middle class… seems obvious right?

You could tax 100% of all of the top 1%'s income (not progressively, just a flat 100% tax) and it'd cover less than double the federal government's budget deficit in the US. There would be just enough left over to pay for making the covid 19 ACA subsidies permanent and a few other pet projects.

Of course, you can't actually tax 100% of their income. In fact, you'd need higher taxes on the top 10% than anywhere else in the West to cover the deficit, significantly expand social programs to have an impact, and lower taxes on the middle class.

It should be pointed out that Australia has higher taxes on their middle class than the US does. It tops out at 45% (plus 2% for medicare) for anyone at $190k or above.

If you live in New York City, and you're in the top 1% of income earners (taking cash salary rather than equity options) you're looking at a federal tax rate of 37%, a state tax rate of 10.9%, and a city income tax rate of 3.876% for a total of 51.77%. Some other states have similarly high tax brackets, others are less, and others yet use other schemes like no income tax but higher sales and property taxes.

Not quite so obvious when you look closer at it.

The point isn't to just cover the tax bill, it's that by shifting the burden up the class ladder, there is more capital available to the classes that spend and circulate their money in the economy rather than merely accumulate it

What are you responding to?

How much of the current burden is shouldered by the middle class? How much by the 1%? How does that compare to other Western nations? What measurable effect would raising this on the 1% be? What about the middle class?

Paper income tax rates are completely and utterly meaningless. Bringing them up is just muddying the waters. Effective rates on total income (including from capital, wealth taxes etc.), post-loopholes, are the only thing that matters.

Without usa the way it is, Australia would be much less prosperous. From the perspective of employers and consumers, labor costs are the same. It’s just that in Europe and Australia, taxes are a larger percentage of cost of labor.

Those are all expensive because of artificial barriers meant to keep their prices high. Go to any Asian country and houses, healthcare and cars are priced like commodities, not luxuries.

Tech and AI have taken off in the US partially because they’re in the domain of software, which hasnt bee regulated to the point of deliberate inefficiency like other industries in the US.

If we had less regulation of insurance companies, do you think they’d be cheaper?

(I pick this example because our regulation of insurance companies has (unintuitively) incentivized them to pay more for care. So it’s an example of poor regulation imo)

Health care is the more complicated one of the examples cited, but housing definitely is an 'own goal' in how we made it too difficult to build in too many places - especially "up and in" rather than outward expansion.

Stuff like this isn't Wall Street or Billionaires or whatever bogeyman - it's our neighbors: https://bendyimby.com/2024/04/16/the-hearing-and-the-housing...

Health care is complicated, but I don't think it would hard to understand how less regulations could lower prices. More insurers could enter markets, could compete across state lines, and compliance costs could be lowered.

However regulation is helpful for those already sick or with pre-existing conditions. Developed countries with well-regulated systems also have better health outcomes than the US does.

Well, they'd be more functional as insurance, at least! The way insurance is supposed to work is that your insurance premium is proportional to the risk. You can't go uninsured and then after discovering that your house is on fire and about to burn down, sign up for an insurance plan and expect it to be covered.

We've blundered into a system that has the worst parts of socialized health care and private health insurance without any of the benefits.

you mean the same Asia that has the same problem? USA enjoying arbitrage is not actually a solution nor is it sustainable. not to mention that if you control for certain things, like house size for instance relative to inflation adjusted income it isn't actually much different despite popular belief.

> Go to any Asian country and houses, healthcare and cars are priced like commodities, not luxuries.

What do you mean? Several Asian cities have housing crises far worse than the US in local purchasing power, and I'd even argue that a "cheap" home in many Asian countries is going to be of a far lower quality than a "cheap" home in the US.

It would be kinda funny if not so tragic how economists will argue both "[productive improvement] will make things cheaper" and then in the next breath "deflation is bad and must be avoided at all costs"

But is it really, though? Dollars aren't meant to be held.

I think the idea of dollars as purely a trading medium where absolute prices don't matter wouldn't be such an issue if wages weren't always the last thing to rise with inflation.

As it is now anyone with assets is only barely affected by inflation while those who earn a living from wages have their livelihood eroded over time covertly.

Exactly as the current owners… ahem, leaders of this country want it.

Barely affected? They benefit massively from it. That is why the rich get richer.

True, in terms of share of the pie for sure

>in the real world are more expensive: health care, housing, cars.

Think of it another way. It's not that these things are more expensive. It's that the average US worker simply doesn't provide anything of value. China provides the things of value now. How the government corrected for this was to flood the economy with cash. So it looks like things got more expensive, when really it's that wages reduced to match reality. US citizens selling each other lattes back and forth, producing nothing of actual value. US companies bleeding people dry with fees. The final straw was an old man uniting the world against the USA instead of against China.

If you want to know where this is going, look at Britain: the previous world super power. Britain governed far more of the earth than the USA ever did, and now look at it. Now the only thing it produces is ASBOs. I suppose it also sells weapons to dictators and provides banking to them. That is the USA's future.

Yep. My grandma bought her house in ~1962 for $20k working at a factory making $2/hr. Her mortgage was $100/m; about 1 weeks worth of pay. $2/hr then is the equivalent of ~$21/hr today.

If you were to buy that same house today, your mortgage would be about $5100/m-- about 6 weeks of pay.

And the reason is exactly what you're saying: the average US worker doesn't provide as much value anymore. Just as her factory job got optimized/automated, AI is going to do the same for many. Tech workers were expensive for a while and now they're not. The problem is that there seems to be less and less opportunity where one can bring value. The only true winners are the factory owners and AI providers in this scenario. The only chance anybody has right now is to cut the middleman out, start their own business, and pray it takes off.

But the us is China's market, so the ccp goes along even though they are the producer. Because a domestic consumer economy would mean sharing the profits of that manufacturing with the workers. But that would create a middle class not dependent on the party leading (at least in their minds, and perhaps not wrongly) to instability. It is a dance of two, and neither can afford to let go. And neither can keep dancing any longer. I think it will be very bad everywhere.

Well, politically, housing becoming cheaper is considered a failure. And this is true for all ages. As an example, take Reddit. Skews younger, more Democrat-voting, etc. You'd think they'd be for lower housing prices. But not really. In fact, they make fun of states like Texas whose cities act to allow housing to become cheaper: https://www.reddit.com/r/LeopardsAteMyFace/comments/1nw4ef9/...

That's just an example, but the pattern will easily repeat. One thing that came out of the post-pandemic era is that the lowest deciles saw the biggest rises in income. Consequently, things like Doordash became more expensive, and stuff like McDonald's stopped staffing as much.

This isn't some grand secret, but most Americans who post on Twitter, HN, or Reddit consider the results some kind of tragedy, though it is the natural thing that happens when people become much higher income: you can't hire many of them to do low-productivity jobs like bus a McD's table.

That's what life looks like when others get richer relative to you. You can't consume the fruits of their labor for cheap. And they will compete for you with the things that you decided to place supply controls on. The highly-educated downwardly-mobile see this most acutely, which is why you see it commonly among the educated children of the past elite.

Thank you, I've replied too many times that if people want low priced housing, it's easily found in Texas. The replies are empty or stating that they don't want to live there because... it's Texas.

So the young want cheap affordable housing, right in the middle of Manhattan, never going to happen.

Don’t blame people they want to live close to where the good jobs are.

Housing is a funny old one and speaks to it being a human problem. One thing a lot of people dont truly engage with with the housing issue is that its a massive issue of distribution. Too many people want to live in too few places. Yes, central banks & interest rates (being too low and also now being relatively too high), nimbyism, and rent seeking play an important role too but solving the "too many people live in too few places" issue actually fixes that problem (slowly, and possibly unpalatably slow for some, but a fix nonetheless)

The key issue upstream is that too many good jobs are concentrated in too few places, and that leads to consumerism stimulating those places and making them further more attractive. Technology, through Covid, actually gave governments a get out of jail free card by allowing remote work to become more mainstream. Only to just not grasp the golden egg they were given. Pivot economies more to remote working more actively helps distribute people to other places with more affordable home. Over time, and again slowly, those places become more attractive because people now actually live there.

Existing homeowners can still wrap themselves in the warm glow of their high house prices which only loses "real" value through inflation which people tend not to notice as much.

But we decided to try to go back to the status quo so oh well

I see the issue of housing is a combination of:

- House prices increasing while wages are stagnant

- Home loans and increasing prices mean the people going for huge leverages on their home purchases

- Supply is essentially government controlled, and dependent, and building more housing is heavily politicized

- A lot of dubious money is being created, which gets converted to good money by investing it in the housing market

- Housing is genuinely difficult to build and labor and capital intensive

> The key issue upstream is that too many good jobs are concentrated in too few places

This no longer is the case with remote work on the rise, If that were the case, housing prices would increase faster in trendy overpriced places, but the increase as of late was more uniform, with places like London growing slower (or even depreciating, relatively speaking) to less in-demand places.

I'd argue that if your point around remote fully held true then that would be shown in the very short-term by rental prices (as the key indicator of people leaving London in lieu of population/census data) but that hasnt been apparent in the data. London rentals have seen much stronger growth post-covid than other places in the UK.

What is happening with house prices in london is a combination of the simple effects of high-ish interest rates v high house prices (limiting affordability) and also flats in general taking a beating from post-grenfell building regs changes and leasehold issues. When you look at granular data there is still a surprising amount growth in Zone 3-4 onwards in London because actual houses in those locations are still sort of achievable for decently paid couples.

Also regionally, a bit glib, but the price increases are happening in Manchester not Bolton or Sheffield not Scunthorpe. If remote working was truly acceptable then those latter locations would be seeing far more inward movement of people but they're not really

Food and clothes are much cheaper. People used to have to walk or hitchhike a lot more. People died younger, or were trapped with abusive spouses and/or parents. Crime was high. There was little economic mobility. It really sucked if you weren’t a straight white man. Houses had one bathroom. Power went out regularly. Travel was rare and expensive; people rarely flew anywhere. There was limited entertainment or opportunities to learn about the world.

yeah that my question to the author too - if A.I is to really earn its keep it means A.I should help in getting more physical products into people's hands & helping with producing more energy.

physical products & energy are the two things that are relevant to people's wellbeing.

right now A.I is sucking up the energy & the RAM - so is it gonna translate into a net positive ?

That's the question though isn't it. If everyone got a subscription to claude-$Latest would they be able to pay their rent with it?

No, because they’d be waiting in the lengthy queues that would be necessary for anyone to use it. There are hard constraints to this tech that make what you’re talking about infeasible.

No because nurses, mechanics, and janitors are still needed.

It's interesting to see Cyberpunk 2077 became somehow relatable more and more.

Sci fi works on this topic are about as old as sci fi. I’m terrified the stories started hitting close to home in the past few years.

I remember reading Burning Chrome, written in 1982, and one of the characters commented on late-stage capitalism.

It's inflation, simple as that. The US left the gold standard at the exact same time that productivity diverged from wages. Coincidence? No.

Pretty much everything gets more expensive, with the outliers being tech which has gotten much cheaper, mostly because the rate at which it progresses is faster than the rate at which governments can print money. But everything we need to survive, like food, housing, etc, keeps getting more expensive. And the asset class get richer as a result.