Post: #1

I am starting this book that already looks like one of the most important books of the 21st century that help dispels many of the lies if capitalism. The elite will do everything in their power to attack it

There are many reasons why French academic Thomas Piketty’s 685-page tome, “Capital in the 21st Century,” has vaulted to the top of the Amazon.com best seller list and is being discussed with equal fervor by the world’s top economic policy makers and middle class Americans who wonder why they haven’t gotten a raise in years.

The main reason is that it proves, irrefutably and clearly, what we’ve all suspected for some time now—the rich ARE getting richer compared to everyone else, and their wealth isn’t trickling down. In fact, it’s trickling up.

Piketty’s 15 years of painstaking data collection—he poured over centuries worth of tax records in places like France, the U.S., Germany, Japan and the U.K—provides clear proof that in lieu of major events like World Wars or government interventions like the New Deal, the rich take a greater and greater share of the world’s economic pie. That’s because the gains on capital (meaning, investments) outpace those on GDP. Result: people with lots of investments take a bigger chunk of the world’s wealth, relative to everyone else, with every passing year.

The only time that really changes is when the rich lose a bundle (as they often do in times of global conflict) or growth gets jump started via rebuilding (as it sometimes does after wars).


http://time.com/73060/thomas-piketty-book/

Post: #2

Piketty is just another French guy talking smack about the rich. For good measure, he takes a couple shots at America. This book is nothing more than the same tired old bullshit that populist demagogues have been spewing for centuries.

Post: #3

The fact that mainstream Chicago/Austrian economists are losing their shit about this book means it should be read. Calling it populist is a pathetic refutation of his argument that capital accumulation and rent seeking (as seen since WWII)are bad for everyone who isn't already rich.

It is definitely on my reading list at some stage.

Post: #4

The fact that you think Austrian economics is mainstream is proof that you have no idea what the fuck you're talking about.

Mainstream economists are not losing their shit over this any more than they lose their shit over other nonsense. They bitch about it, call it nonsense and then continue building models that are more complex than what is justified given the sorry state of economic "knowledge". But I digress.

Capital accumulation and rent seeking are the same tired old arguments of populists.

The only thing that Piketty (maybe) added to the argument was one specific rationalization for wealth confiscation. He argues that if the growth rate of capital, r, exceeds the growth rate of GDP, g, then the result is runaway inequality. This is a hypothesis. Piketty hasn't proven shit.

If we assume he's correct in this statement, the real economy would have to function in such a way that there are no diminishing returns to capital in order for runaway inequality to happen. That does not sound realistic but maybe it's true. Either way, it's idiotic to accept Piketty's hypothesis without really understanding anything about economics or doing some research about what Piketty is really saying.

Post: #5

http://time.com/73060/thomas-piketty-book/

It is partly too aptly worded against the rich and can be deemed rich-bashing.

But is it truly, when taking into account the biggest scam and trickle-up in our time: Fraudulent Interest Rates and Fractional Reserve Banking?

In short:

1. All money can be created by States themselves interest free - just print it - don't print obligations that the super-rich buy. Examples: Lincoln, JFK - 100 mio. $ printed, Woergl 1932, Canada 1930s to 1960s etc.

2. Fractional Reserve Banking and thus most asset backed lending is a scam (i.e. real estate). Banks request reserves from Central Banks (which are BTW partly or fully privately owned or controlled) AFTER the loan has been given via a few key-strokes. It is a legal money-printing machine with which you can control the volume and money and create busts and crashes on command. Real Estate credit should be interest-free - examples: JAK Banks of Sweden - giving interest free credits for decades.

3. If you factor in those interest rates payments into prices of the economy, then those interest rate payments are roughly 50% of ALL PRICES of goods and services sold.

4. It also means thus that 50% of all price-volume ends up in some very very rich hands - they must by reverse logic be multiple times richer than the likes of Bill Gates and Larry Ellison - rich enough to be kept off the Forbes list altogether - that is real wealth.

5. If you control money supply, lend to States, lend to big corporations you are the real owners of the world - just have to do it in secrecy. It is btw IMPOSSIBLE to compete against this 1 Trillion $/ year interest rate revenue transfer to the 0,00001% - you have to be among the 0,01% to profit well from this transfer via investments - being one of the 1% is not enough.

THAT IS THE FINANCIAL RED PILL! More: http://realcurrencies.wordpress.com/

And this is not against Wealth - in fact with interest free money many more small and medium sized companies would have access to capital and most big corporations would not survive, most banks would revert to local purely administrative banks, everyone would have a house/appartment and probably only men would have to work (90% of women doing shitty jobs anyway). Don't count on it though.

I know that many manosphere guys I respect are libertarians, because in a free system Alphas/Sigmas can succeed better. It is however a fake system designed by the Super-super-wealthy - Von Mises financed by Rockefeller etc. It is simply impossible to compete against that kind of system in the long run.

Post: #6

http://www.bostonglobe.com/business/2014...story.html

Q. What is the impact of a growing wealth gap?

A. The main problem to me is really the proper working of our democratic institutions. It’s just not compatible with an extreme sort of oligarchy where 90 percent of the wealth belongs to a very tiny group. The democratic ideal has always been related to a moderate level of inequality. I think one big reason why electoral democracy flourished in 19th-century America better than 19th-century Europe is because you had more equal distribution of wealth in America.

Q. Your research shows that profits on investments — capital — increase faster than wages and economic growth. But a lot of people think greater inequality can help fuel stronger growth.

A. When inequality gets to an extreme, it is completely useless for growth. You had extreme inequality in the 19th century, and growth was not particularly large.

Because the growth rate of productivity was 1 to 1.5 percent per year (in 19th-century Europe), and it was much less than the rate of return to wealth, which on average was 4 to 5 percent, the consequence was huge inequality of wealth. It’s important to realize that innovation and growth in itself are not sufficient to moderate inequality of wealth.

Q. Are we automatically on a course that leads us back to the Gilded Age?

A. Nobody knows. The main message of the book is that there is no pilot in the plane. There is no natural process that guarantees that this is going to stop at an acceptable level.

Q. Would inequality matter if wages were still growing for the middle class?

A. There are two big forces that are squeezing the middle class. One is the rise of the very top executive compensation, which implies that the share of labor income going to the middle and lower class is shrinking. That has been quite spectacular in the US. The other force we see is that the share of a country’s income going to labor tends to decline when the share that goes to capital is rising.

Q. You call meritocracy a “dangerous illusion.” That goes against how a lot people think the US economy works.

A. Our modern democratic ideal is based on the hope that inequalities will be based on merit more than inheritance or luck. Sometimes, meritocratic arguments are used by the winners of the game to justify the role of unlimited inequality. I don’t think there is any serious evidence that we need to be paying people more than 100 times the average wage in order to get high-performing managers.

Q. People in Europe and the United States have a nostalgic view of the post-World War II period. We saw growing national prosperity that benefited everyone. Is it possible to get back to that?

A. It was really a transitory period due to very exceptional circumstances. Growth was extremely high, partly because of postwar reconstruction. Also, growth was exceptionally high because population growth as a rule had been extremely large in the 20th century. This isn’t really an option for policy makers. The other reason I think we should not be nostalgic is that part of the reason the inequalities were lower in the ’50s and ’60s is that the wars destroyed some of the inherited capital that were the sources of earlier inequality.

Q. Why do you think a wealth tax would address the destabilizing force of rising inequality?

A. Instead of having a flat tax on real estate property, you would have a progressive tax on individual net worth. You would reduce the property tax for the people who are trying to start accumulating wealth.

Q. Every American politician says education is the answer to inequality and immobility. Is more education the answer?

A. This is the most powerful equalizing force in the long run. But it’s not enough. You need both education and taxation.

Q. How did watching US TV shows like “House,” “Bones,” “West Wing,” and “Damages” help you with this book?

A. They tell us stories about how you can get rich, get poor, etc. The people who are heroes of the series, many of them have PhD. They represent the model of skill-based inequality. . . . (The shows are) like novels in the 19th century. They’re able to show in an extreme way a kind of deep justification or deep criticism of the inequality structure.

Q. Your critics see you as pushing a political agenda about class divide.

A. This is a book about historical facts. People can do what they want to do with it. The book has four parts, and Part No. 4 is about policy implications. . . . To me, this isn’t the most important part. If you disagree with these 100 pages, that’s fine. The whole purpose of the first 500 pages is to help people to make their own conclusions.

Post: #7

I was going to read this book - but haven't gotten round to it.

Anyone know if it is a fun read - or is it heavy going?

Post: #8

(04-24-2014 08:02 AM)cardguy Wrote:  I was going to read this book - but haven't gotten round to it.

Anyone know if it is a fun read - or is it heavy going?

you be the judge yourself - table of contents in the link: http://piketty.pse.ens.fr/en/capital21c2

I would say the author shows that obviously capital will win ever more suffocating all potential competition in the future. It will thus create a neo-feudalistic society.

His solutions of a wealth tax, capital tax etc. would just slow down the current process. Interest Free Money for States and private individuals would solve it.

Post: #9

Haters gonna hate the rich.

Post: #10

From the Mises institute:

Quote:This 42 year economist from French academe has written a hot new book: Capital in the Twenty-First Century. The US edition has been published by Harvard University Press and, remarkably, is leading the best seller list, the first time that a Harvard book has done so. A recent review describes Piketty as the man “who exposed capitalism’s fatal flaw.”

So what is this flaw? Supposedly under capitalism the rich get steadily richer in relation to everyone else; inequality gets worse and worse. It is all baked into the cake, unavoidable.

To support this, Piketty offers some dubious and unsupported financial logic, but also what he calls “a spectacular graph” of historical data. What does the graph actually show?

The amount of U.S. income controlled by the top 10% of earners starts at about 40% in 1910, rises to about 50% before the Crash of 1929, falls thereafter, returns to about 40% in 1995, and thereafter again rises to about 50% before falling somewhat after the Crash of 2008.

Let’s think about what this really means. Relative income of the top 10% did not rise inexorably over this period. Instead it peaked at two times: just before the great crashes of 1929 and 2008. In other words, inequality rose during the great economic bubble eras and fell thereafter.

And what caused and characterized these bubble eras? They were principally caused by the U.S. Federal Reserve and other central banks creating far too much new money and debt. They were characterized by an explosion of crony capitalism as some rich people exploited all the new money, both on Wall Street and through connections with the government in Washington.

We can learn a great deal about crony capitalism by studying the period between the end of WWI and the Great Depression and also the last twenty years, but we won’t learn much about capitalism. Crony capitalism is the opposite of capitalism. It is a perversion of markets, not the result of free prices and free markets.

One can see why the White House likes Piketty. He supports their narrative that government is the cure for inequality when in reality government has been the principal cause of growing inequality.

The White House and IMF also love Piketty’s proposal, not only for high income taxes, but also for substantial wealth taxes. The IMF in particular has been beating a drum for wealth taxes as a way to restore government finances around the world and also reduce economic inequality.

Expect to hear more and more about wealth taxes. Expect to hear that they will be a “one time” event that won’t be repeated, but that will actually help economic growth by reducing economic inequality.

This is all complete nonsense. Economic growth is produced when a society saves money and invests the savings wisely. It is not quantity of investment that matters most, but quality. Government is capable neither of saving nor investing, much less investing wisely.

Nor should anyone imagine that a wealth tax program would be a “one time” event. No tax is ever a one time event. Once established, it would not only persist; it would steadily grow over the years.

Piketty should also ask himself a question. What will happen when investors have to liquidate their stocks, bonds, real estate, or other assets in order to pay the wealth tax? How will markets absorb all the selling? Who will be the buyers? And how will it help economic growth for markets and asset values to collapse under the selling pressure?

In 1936, a dense, difficult-to-read academic book appeared that seemed to tell politicians they could do exactly what they wanted to do. This was Keynes’s General Theory. Piketty’s book serves the same purpose in 2014, and serves the same short-sighted, destructive policies.

If the Obama White House, the IMF, and people like Piketty would just let the economy alone, it could recover. As it is, they keep inventing new ways to destroy it.

Post: #11

The problem isn't the rich per se, or people who work hard and have exceptional talent. The issue is whether government unfairly or unduly enables the concentrated accumulation of wealth for certain individuals and/or groups without which they would be far less profitable or not exist at all. I will give you a simple example: in the US I cannot buy my own cable box if I want to watch cable TV. I have to rent it from the company for about $10-15/month, depending on the type of box. Now why is that? It is because of rules and regulations that the companies have lobbied for. The complexity of the US tax code is not a bug, it's a feature (for certain parties).

Post: #12

There is a big problem with inequality, but he can fuck himself with his wealth tax crap.

I got taxed on all of my wealth as income already. He wants to tax it again?

Post: #13

(04-24-2014 09:41 AM)Sp5 Wrote:  There is a big problem with inequality, but he can fuck himself with his wealth tax crap.

I got taxed on all of my wealth as income already. He wants to tax it again?

Two responses:

Ideally based on his data, you would have been taxed less on your income as you were accumulating a reasonable amount of wealth. ( let's postulate 300k passive income per year as reasonable. I think that's pretty luxurious.)

--If you have "earned", say, 100 million-- which is pretty hard to argue you did all by yourself without society and you would have done it on a desert island all alone--

and..

--you own 50 apartment buildings in which 3000 minimum wage workers are housed increasing your 100 million more each month.

Then yes, you should pay more taxes to help the people that made you rich. You're welcome to the argument you basically "own" the incomes of those 3000 workers due to whatever arbitrage you did to earn the initial 100 million. Hard to argue you "earned" 100 million when even a 80-hour a week surgeon saving people's lives don't make that much.

It's more or less essential those 3000 people are kept in the dark about who owns them, and that they feel like their owners are their "friends" , and that they can be just like them if they can just steal enough from the other 2999.

Post: #14

(04-24-2014 09:54 AM)iknowexactly Wrote:  

(04-24-2014 09:41 AM)Sp5 Wrote:  There is a big problem with inequality, but he can fuck himself with his wealth tax crap.

I got taxed on all of my wealth as income already. He wants to tax it again?

Two responses:

Ideally based on his data, you would have been taxed less on your income as you were accumulating a reasonable amount of wealth. ( let's postulate 300k passive income per year as reasonable. I think that's pretty luxurious.)

--If you have "earned", say, 100 million-- which is pretty hard to argue you did all by yourself without society and you would have done it on a desert island all alone--

and..

--you own 50 apartment buildings in which 3000 minimum wage workers are housed increasing your 100 million more each month.

Then yes, you should pay more taxes to help the people that made you rich. You're welcome to the argument you basically "own" the incomes of those 3000 workers due to whatever arbitrage you did to earn the initial 100 million. Hard to argue you "earned" 100 million when even a 80-hour a week surgeon saving people's lives don't make that much.

It's more or less essential those 3000 people are kept in the dark about who owns them, and that they feel like their owners are their "friends" , and that they can be just like them if they can just steal enough from the other 2999.

All of those issues can be solved by progressive income taxation and closing loopholes.

Almost none of my income was "passive." I had high wages for a stretch and got taxed on it. Now that I've saved, the government wants a cut of it again? Fuck that. Time to buy ammo.

I'll also buy gold and squirrel it away before they take a cut out my savings. Remember, they tried a tax on bank deposits in Cyprus, and as the Mises post says, they want to try it with everyone to pay for the crony capitalism that plagues the system.

Post: #15

Sp5, the problem with loopholes, which is really just ambiguity in the tax law, is that they are there by design. People pay good money to put them there, so mere appeals to fairness or justice will not get them out. You will never remove them barring some kind of miraculous (or disastrous) event. Just read any recent book about DC...it's an insidious racket. I totally feel you about high wages; I pay a shitload at tax time. I believe a wealth tax would capture the value of your non-income assets. Rich people do not have income really. So they would be proportionally affected. This distinction is rarely raised on tv.

Post: #16

(04-24-2014 10:17 AM)Menace Wrote:  Rich people do not have income really. So they would be proportionally affected. This distinction is rarely raised on tv.

Rich people don't own anything personally either, so any kind of wealth tax on an individual level would still only hit the middle class.

The only way you can target the rich is by taxing the corporations they own or the transactions they make. Both of those options would have to be implemented at the same time by every other major country, otherwise the country that does it first would see massive capital outflows.

Another problem with wealth-based taxes is that it encourages two things:
1. wealthy people, many of whom are old and close to retirement, to move abroad and take themselves out of the tax system.
2. foreigners to work in the country temporarily, earning high incomes, and then leave without ever paying much tax. This is especially the case with sports people, celebrities, etc.

Post: #17

Austrian economists are losing their shit similarly to how the Jews were losing their shit over Mein Kampf. Both groups understand the negative repercussions of idiotic literature blaming an "other" in times of economic crisis. This doesn't end well, especially for the poor and middle class, because the rich are the best suited and able to flee any country that takes this book seriously enough to implement policy based on Marxist drivel that has failed time and time again.

Post: #18

I have not read his book but have seen him in a couple of interviews so far and he is careful to point out that he doesn't have the answers about to do in response to what he writes about. When he does make suggestions they are usually in response to an interviewer's question.

The main point of his book, from what I can tell and what he says, is not prescriptive.

Post: #19

The 1% is a strange phrase. Since the 1% feel poor since they hang out in circles that include the 0.1%

And the 0.1% feel poor because they hang out in circles that include the 0.01%.

And the 0.01% feel poor because they hang out in circles that include the 0.0001%

Not only that - there is a strange acceleration in increases in wealth the higher up you go.

Over the past few decades - the 0.1% have added more wealth faster than the 1% and the 0.001% have increased their wealth faster than the 0.1% and so on...

This is particularly true of the major cities where most rich people live.

And it is why most rich people will guess the average household earns about 100,000 dollars.

When in fact it is about 50 thousand dollars. It is quite funny seeing rich people try and grasp how much a pint of milk is or how much the average income in the country is.

Reminds me of when Mitt Romney offered to make a casual bet for 10 grand during one of the presidential debates.

Post: #20

(04-24-2014 10:49 AM)The_CEO Wrote:  The main point of his book, from what I can tell and what he says, is not prescriptive.

I haven't read the book either, but in the table of contents there's a chapter dedicated to a "global wealth tax" - something which is impossible to implement. There will always be countries (China, Russia, India, etc.) not willing to cooperate with the West.

Basically, there is income inequality. Nothing short of a major global conflict is going to fix it.

Post: #21

Forget Austrian Economics or the Mises crowd - it is basically a wet dream of the super-elite.
Also forget any form of taxation or closing loopholes etc. Worked a little in the 40s-70s, but in this globalized environment it is useless.

The only way is interest free economy, a US government owned central bank - exactly the one that Andrew Jackson founded (or abolished the 2nd private one) and paramount is also the abolition of Fractional Reserve Banking and most of the usury - real estate.

But the discussion is useless anyway except for recognition of who is leading the people into a dead end solution - Ron Paul, Libertarianism, Austrian Economics, "Updated" Communism etc.

Post: #22

Loopholes were closed in the 40s-70s? HAHAHAHAHAHAHAHAHAH

My grandfather was making a lot of money in those days and apparently no one paid the high tax rates. Deductions were allowed for hookers in Vegas the enforcement was so lenient.

Post: #23

(04-24-2014 10:56 AM)cardguy Wrote:  Reminds me of when Mitt Romney offered to make a casual bet for 10 grand during one of the presidential debates.

That was during the Republican primary debates. Romney frequently bragged about his wealth and how unapologetic he was about it during primaries, then focused on presenting himself as similar to the average Joes during the presidential race against Obama.

Post: #24

What Piketty is proposing -though unworkable - would actually stop the concentration of wealth at the top. I definitely don't support a wealth tax but it doesn't hurt me as bad as income taxes on "the rich" would.

The problem with most campaigns against the rich is that when they get put into practice they end up being campaigns against the upper-middle class. The people at the top pretty much stay at the top, give or take a couple severed heads to appease the masses. Picketty's proposal for a wealth tax would just turn into a tax on the upper-middle class i.e. people who do not live off of their capital. Businesspeople, physicians, etc. Mostly people who grew up middle class and worked their way up.

While I am not yet in the top 1% by wealth, I am in the top 1% by income. I grew up in the projects, in a family that was probably in the bottom 1%. While I may not be a typical example of the top 1%, I am far more typical than the stereotype many people have of Mr. Moneybags living it up on Grand Cayman. My parents were poor immigrants, not evil oligarchs.

Post: #25

(04-24-2014 12:38 PM)KorbenDallas Wrote:  Loopholes were closed in the 40s-70s? HAHAHAHAHAHAHAHAHAH

My grandfather was making a lot of money in those days and apparently no one paid the high tax rates. Deductions were allowed for hookers in Vegas the enforcement was so lenient.

Taxation etc. worked a little - with it I mean some part of taxation - (a CEO's 100 mio. $ wage of today would be taxed at 70% in the 1960s) and a bigger part of unionized high wages. A factory worker of the lowest rung was paid the equivalent of 45.000$-50.000$ of today's wages with a lower tax-rate for that kind of money.

That ended in the 1970s. Loopholes were never closed - even if, then more complicated ones are opened. Wallstreet companies now deduct their high level hookers via shell-companies and "trainings", "company-massages" etc. Sometimes even middle-level managers used their business cards for that kind of entertainment - they just said that they had clients with them (70% of the time it was not true, but who can prove that shit?).

Now as I said I am no fan of taxation - interest free money and a Government which finances itself mostly via tariffs and a 10% non-negotiable-flat-tax on any income - that should be enough.