What do you think are the major pros/cons of each current generation?

[David Horn]

Sorry I missed this at the time. I was on vacation, and, by family policy, we turn-of the internet when we go. It's easier to enjoy yourself if the worries of the world don't intrude.

(02-20-2022, 03:45 PM)JasonBlack Wrote:

David Horn Wrote:You might want to give Thomas Pikkety's book Capital in the 21st Century a read (not a trivial undertaking, to be totally honest about it).  He makes the point with one simple mathematical expression: r > G.  What he means by that is, rate of return on investments exceeds the Growth rate of the economy.  This has been going on for a long time and is in full crescendo today.  When that occurs, the holders of capital, mostly the already very wealthy, increase their wealth faster than the economy grows, so the excess becomes even more capital and buys what they don't already own.  Given enough time, and that time frame isn't all that long, the few hyper wealthy will own everything.  OK, you might have a home, at least for a while, but that imbalance is terminal.  It's a formula for modern Feudalism.  The purpose of the book is to show that in terms that can't be ignored -- which it does in spades.

Personally I blame this as much on fiat currency as anything else. We went off the gold standard in 1971 and this happened. Wages have a long history of rising far slower than inflation under such a model. The primary people it hurts are wage earners, responsible savers and retirees no longer earning income. 

I can tell you as an investor, it's not us it hurts haha. 

I doubt this can be blamed on Bretton Woods.  More to the point, we had two oil shocks: '71 and '79.  When the cost of fuel doubles, like it did in '71, inflation will take hold.  Since your chart is in "real earnings", the inflation factor has been obscured, but that's the beginning of stagflation that created the cover big business used to raise prices at will.  Worse, the economic darling of the time, Milton Friedman, made the argument that the only purpose of business is profit.  This Friedman Doctrine became the business standard after Netron Jack Welch adopted it in earnest at GE.  

99% of this problem originated in the private sector, but the public sector not only failed to dampen it, Reagan actually cheered it on.  Once inflation was tamed by Paul Volker and the unions tamed by Saint Ronny, the curve became permanent.

Jason Wrote:

David Wrote:The idea is wonderful in theory and unworkable in practice. A capitalist economy operates on a positive feedback loop: get rich, use that wealth to get richer, rinse and repeat.  Lobbyists, disgusting as they are, are a symptom of the problem, not the problem itself.

It's not unworkable in practice. New Zealand saw HUGE drops in corruption when they severely restricted campaign spending. Currently they fluctuate between 1st and 2nd place in terms of low government corruption.

I thought you were a capitalist. This is more along the lines of my thinking on social policy. Unfortunately, emulating the Kiwis will require a new and improved SCOTUS. I good with that. How about you?