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Talking about inequalities...
Pandemic made some people really rich.
The fortunes of the five richest men — Tesla CEO Elon Musk, Bernard Arnault and his family of luxury company LVMH, Amazon founder Jeff Bezos, Oracle founder Larry Ellison and investment guru Warren Buffett — have spiked by 114% in real terms since 2020, when the world was reeling from the pandemic.
While they made fortune doubling their wealth, almost 5 billion people have become poorer.
So, it's predicted that they might need only 10 years to become trillionaires (whereas to fight poverty, we need more than 200 years)
If someone does reach that trillion-dollar milestone — and it could be someone not even on any list of richest people right now — he or she would have the same value as oil-rich Saudi Arabia.
That is humorous.
They aren't truly wealthy unless they can CREATE those new money tokens.
The REAL wealth is held by those who CREATE the new mediums, used for trade.
In case you think that means government, guess again. If a government could create money, why would it need to borrow money or tax its subjects? Any government that creates money can just spend it into circulation.
Talking about inequalities...
Pandemic made some people really rich.
The fortunes of the five richest men — Tesla CEO Elon Musk, Bernard Arnault and his family of luxury company LVMH, Amazon founder Jeff Bezos, Oracle founder Larry Ellison and investment guru Warren Buffett — have spiked by 114% in real terms since 2020, when the world was reeling from the pandemic.
While they made fortune doubling their wealth, almost 5 billion people have become poorer.
So, it's predicted that they might need only 10 years to become trillionaires (whereas to fight poverty, we need more than 200 years)
If someone does reach that trillion-dollar milestone — and it could be someone not even on any list of richest people right now — he or she would have the same value as oil-rich Saudi Arabia.
Not really true in the US about most becoming poorer during the pandemic - most all became richer - Kiplinger
Quote:
According to a recent Pew Research Center study, which used data from the Census Bureau’s 2020, 2021 and 2022 Surveys of Income and Program Participation, households with more wealth saw an increase in wealth of about $57,800 from 2019 to 2021. Richer households added $172,000 to their net worth.
During that same period, poorer households that had zero net worth in 2019 had a median net worth of $500 in 2021. On the whole, however, the typical American household's net worth increased by 30%.
Also someone being rich does not make others poorer or impact poverty - that is a fallacy that many news reporters seem to make.
We have not been fighting poverty for 200 years but what is meant by poverty in the US, even someone that is poor in the US is normally in the top 10% of wealth in the world.
Not really true in the US about most becoming poorer during the pandemic - most all became richer - Kiplinger
Even middle class Americans can afford less and less. Not to mention the lower class that really struggles.
First it was about houses, now I read that many can't afford to buy new cars.
Most middle-class Americans say they can't support their cost of living.
Inequality is GOOD. Everyone who can spell "economics" understands this. Inequality occurs because some people add tremendous value to society and reap compensation for doing so. Everyone is better off as a result of the accomplishments of the extraordinary few who make extraordinary contributions to progress.
Yes, everyone is better off.
Let's make this tangible for you. Let's take the case of Elisha Graves Otis. Elisha Otis was born in Vermont in 1811, and was a master mechanic, having invented many safety devices and labor saving devices used in bedstead factories in the Northeast US. One such invention was what he named the "Safety Hoist" - it had an ingenious safety device that prevented it from falling if its lifting rope or chain broke. Lives that might be lost were saved.
He went out on his own, setting up shop in Yonkers, NY and sold the world's first Safety Freight Elevator Machine on September 20, 1853. To demonstrate just how safe it was, the following spring he installed a Safety Freight Elevator in NYC, famously riding in it up high and ordering a helper to CUT THE LIFT ROPE. He went on to patent independently controlled steam engines to raise and lower the Safety Elevator, and many more improvements as well.
Elisha Otis became a very wealthy man. So in the parlance of Income Inequality, by inventing what we now think of as modern elevators, Elisha Otis ADDED TO income inequality. After all, he was making money hand over fist while the other millions of Americans were plodding along with their lives as usual (most Americans were directly involved in agriculture at that time).
But although the wealth gap between this man, inventor Elisha Otis, and his customers was higher than it was before the invention, the customers got a product they valued that made their lives both better and easier. In economic terms, the wealth of these customers increased slightly while Otis' wealth increased greatly.
Is that increase in wealth inequality a problem? When I’ve asked not particularly bright high school students this question, most all agree it is not a problem. Ditto for Freshman Econ students. Graduate level Econ students are smart enough that they don't need this example to comprehend the issue.
You can substitute any prominent inventor into the anecdote with the same results.
You could recount the story of Robert McCulloch who in the 1940s invented a light one-man chain-saw.
Or you could examine Robert Noyce who invented the Integrated Circuit and co-founded Intel Corporation.
Or Steve Wozniak & his partner Steve Jobs.
Or Jeff Bezos.
and you can substitute in small businesses who similarly add value
and large corporations who do as well - even when their innovation is something as simple-yet-hard as logistics rather than new product creation.
In each case, by virtue of innovation, many inventors (and shareholders of companies) become wealthy - adding to income inequality and its cousin wealth inequality. In each case, customers were better off than they were before the invention.
In each case, despite an increase in "income inequality," everyone is better off.
Even the not-particularly-bright high school students get it.
Even middle class Americans can afford less and less. Not to mention the lower class that really struggles.
First it was about houses, now I read that many can't afford to buy new cars.
Most middle-class Americans say they can't support their cost of living.
That just showcases that the rich are getting richer because they own assets that increase in value, versus lower and middle class who own liabilities that cost them more to operate.
I'm someone who during the pandemic my net worth increased. Instead of spending the stimulus money on junk, I invested it my brokerage account. The stimulus for my 3 kids went into their UTMA.
Lower interest rates allowed me to refinance my mortgage from 3.875 to 1.875 in 2020. Instead of spending that savings, I pooped it into my mortgage and paid it off at the end of 2023. All my debt got paid off at 43. I have family who instead bought new cars and now they're struggling with increased costs. Car insurance went up. Property tax went up. Grocery spending went up. I remember reading people were spending their stimulus on a new pet to keep them company during the lockdowns. No surprise pet shelters are being inundated with turn ins...
That just showcases that the rich are getting richer because they own assets that increase in value, versus lower and middle class who own liabilities that cost them more to operate.
I'm someone who during the pandemic my net worth increased. Instead of spending the stimulus money on junk, I invested it my brokerage account. The stimulus for my 3 kids went into their UTMA.
Lower interest rates allowed me to refinance my mortgage from 3.875 to 1.875 in 2020. Instead of spending that savings, I pooped it into my mortgage and paid it off at the end of 2023. All my debt got paid off at 43. .
Congratulations, well done.
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