Yeah it’s pretty scary.
Who is better off on average (In terms of per capita GDP)? The people who live in Belgium or the people who live in New Mexico?
This is not news to many of our readers. Of course some will blame Reagan. Some will blame NAFTA. Some will blame Obama. But fundamentally the 2 things which are driving the erosion of the middle class, as I see it, are the financialization of the economy and over regulation. (Taxation is an important factor too.)
A wonderful video from Hans Rosling and Chanel 4 News explaining global wealth in relative terms.
Sometimes wheeling and dealing isn’t always the best way. At least for those of us with very wealthy parents who are inclined to start us off with a nice pile of money.
This speaks to the “financialization” of the modern economy we referenced in a post yesterday. In a fiat currency world the banks truly, and almost totally run the show. The central banks particularly. And the American Federal Reserve most of all. If one is riding the financial asset train one is likely better off than one was in 2000. If however one is not on that train, if one lives in the real economy as most middle class Americans do,
I listened to the Holy Father’s speech today and I thought it was quite good. He didn’t drop any bombs in the House chamber. (Perhaps he’s saving them for the UN General Assembly.) He seemed generally respectful and the kind of priest I wouldn’t have minded listening to on Sunday morning. He struck me as warm. As we’ve said before, we quite like Pope Francis on many levels, but his economics could use some work.
We are not the only ones who feel this way.
Wouldn’t that be great? Porsches for everyone! Well, not really. Perhaps some groceries in most cases.
An interesting little experiment. We’re guessing that the interns at Bloomberg needed something to do one afternoon.
The voluntary exchange of goods and services, the essence of capitalism, is the most moral way to organize an economy. (It’s really self organizing mostly.) You give me something I want. I give you something you want. We both walk away better for the transaction.
Whereas socialism, often couched as somehow morally superior to capitalism, is based fundamentally on theft. Be it of wages, time, property etc. It is driven by force. As such it is deeply immoral.
The state would prefer to keep the capitalists down on the bottom. Innovators make things uncomfortable for the powerful and connected.
Ms. Pelosi has played the crony capitalism game well. The way she sees it – I promise you this is how she sees it – she’s just doing well, while doing good.
It’s the tune of many a crony.
“See, it’s OK that I live like this, even though I rail against the ‘rich,’ because I am one of the good guys. I’m for more money for welfare, and all sorts of other government programs to help the peasantry…
I did not grow up with money. But I did work in finance for years and I have known a number of people with significant wealth. I also live in an old money town, Charlottesville, Virginia.
There is an adage about significant wealth which I think holds generally true and that is that “old money” is smaller than “new money.”
Often with older money there is some patriarch a few generations ago who made a pile of cash in some endeavor,
Capital controls are already a reality in some places on the western periphery. There is talk among some economists about abolishing cash. How long until the Federal Reserve notes in your account are there permanently or semi-permanently? You already can’t take out more that $10,000 without your bank alerting the Feds.
The question I have is, is it your money or not? (I know the answer, but I still ask the question.)
I’m not a fan of Charlie Munger, Warren Buffett’s right hand man. I haven’t been a fan for a long time but this statement back in 2012 really annoyed me.
Such arrogance. I’m sorry Mr. Munger but not all of us get to drink from the Fed’s fire hose of easy money. For many of us gold is a last resort. Not an investment per se, but a hedge against guys like you. Of course you know that and that’s why you said what you said.