What a bad take. The US alone effectively created that much money out of thin air during the pandemic. All of the countries combined printed far more.
Doing the same for an energy project that might actually pay back (unlike the covid losses) is far less disruptive.
Finally, the amount of money hidden away in tax havens by the rich is nothing compared to this. Don’t drag down something as important as the climate crisis with some smooth brained class warfare.
I am not sure of that. If all that money ended up in rich people's pocket, never to see the light of day again we won't be having the inflation crisis. The money through various investments is now out in the open, driving up inflation. It is still unequally distributed and that is causing issues. If there was a magical way to distribute that money equally between everyone inflation won't be an issue. Unfortunately magic isn't real.
I don't claim to know the full causes of the current inflation issues, but inflation can also be caused by a reduction in productivity, not just by an increase in money supply.
There needs to be a reduction in productivity while everyone magically staying at the same income levels though to keep demand high.
The rapid increase in just human labor prices seems to indicate that money is making it to people somehow because COVID didn’t kill enough of the labor force to have that kind of effect.
If you used the money to build renewable infrastructure, most of the money would still end up in rich people's pockets, because typically it's rich people who own the means of producing infrastructure.
No it didn’t. If it all just ended up in rich people’s pockets it wouldn’t have caused this kind of inflation and supply shortages for all of these every day items.
No. They won’t be paid back until the government gets an excess of at least that much in tax revenue.
Something mitigating an ongoing can be expensive, have the intended positive effect immediately, but not be paid back for a long time (or sometimes ever).
Federally subsidized flood insurance is a much smaller scale example. There are many places in Florida and the gulf in general where houses get destroyed by hurricanes and have to be rebuild for $X every 20 years when we only collect maybe 25% of $X in premiums.
People that charge class warfare just don't want anything to change. Wealth accumulated by the rich mostly by burning dinosaurs is just as fictitious as any QE from the Fed.
It would become a lot less real too. The wealth of people who mostly get it from stock ownership is a complete fiction, driven by the scarcity of shares on the open market. If Jeff Bezos dumped his entire holding in AMZN shares, the whole company would be worth a lot less. Not due to any sort of magical effect of Jeff Bezos, but due to the market being flooded with supply.
I guess this means if a hypothetical Bill Gates sold off the vast majority of the 45% of Microsoft stock he owned then the company would then be worth a lot less?
It really is weird how frequently I see the view you espouse and how nobody who repeats it seems to consider the clearest, most obvious counterexample that so completely disproves it.
By that time, he had sold almost all of MSFT. He was a ~2% owner. That sale was a lot more similar in scale to a hedge fund selling a large block of shares than to Jeff Bezos liquidating his holdings.
B) even if he did it would be kind of like saying that your 500k house isnt really worth 500k because if you walked out on to the street and and asked passers by for offers for a maximum of one hour you would almost certainly not get 500k.
The OP said "If Jeff Bezos dumped his entire holding [...]". I find it very hard to equate "dump" with "still over the course of a decade".
> B) even if he did it would be kind of like saying that your 500k house isnt really worth 500k because if you walked out on to the street and and asked passers by for offers for a maximum of one hour you would almost certainly not get 500k.
Now you're exaggerating in the other direction. The point is that if these people whose fortune is entirely stock of a massive company wanted to sell all of that stock for cold hard cash on the stock exchange in the same way you or I might sell our stock for a big purchase, they would actually only get a fraction of the nominal value ascribed to them.
Sure, if they do it slowly over the course of a decade, and if the business avruay survives that long at its current valuation (which Amazon might, but Tesla won't), then they can eventually actually get the fortunes they theoretically own.
Well what you stated never happened, so not sure what there is to disprove. It took Gates a significant amount of time to wind down his ownership stake in Microsoft.
In 2020, as I understand it, Bill gates sold less than 1% of MSFT on the open market there: his holding went from a bit over 2% to a bit over 1%. He had been steadily selling over the last two decades.
Contrast that with Jeff Bezos, who owns 10% of Amazon, or Elon Musk who owns over 20% of Tesla. Half of Gates's holding is nothing in comparison to half of Bezos's.
When you sell large share blocks like Gates did, you do it very slowly to avoid market impact. Elon Musk couldn't sell slowly enough to avoid an impact when he sold shares to buy Twitter.
Oh yeah, he sold it very, very slowly, over 20 years. The hypothetical I was responding to is suggesting that these billionaires' fortunes be liquidated within a year.
Even so, you don't know how much higher the price of MSFT would be if not for Gates's selling. Other factors just drove the price up faster than he drove it down.
I think too many people equate fiction and lies. Stock prices and market caps are not complete lies (the company is still worth something) but they are fictions. I like to think of fiction as "a lie that tells a truth that cannot be told any other way" (adapted from Albert Camus).
Market caps and startup valuations are fictions. That doesn't mean that they don't say something important - they convey information about who has market power, political power, technological progress, etc. All of those things are worth a lot. Fictions can affect reality. They are frequently more powerful than truths. Theranos, Nikola, and Tesla have all moved billions of dollars of real money on the back of fictional product descriptions.
Nobody said it’s a fiction. What is a fiction is pretending the current share price * number of shares is what the value is. That’s completely detached from how the stock market works.
the problem is the allocation of the resources in the real economy. the copper production goes somewhere currently. if half of that suddenly would go to making these super long distance cables that would cause brutal inflation for a lot of things that depend on copper. (sure, eventually it would increase supply too.)
A lot of copper goes to nonelectrical uses that could probably go away.
Whenever I see something mechanical made of bronze or something it always looks like a real waste. New finishes and coatings look pretty good and composites are strong and corrosion resistant, and steel is cheaper.
High taxes always drive capital away into unproductive tax havens.
Reagan's achievement was to eliminate tax shelters in exchange for lower tax rates. This pulled the investment out of those unproductive shelters into productive activities, leading to the prosperity of the 80s.
Reagan created and governed on unprecedented peacetime deficits caused by his military spending and tax changes. If his policy had any meaningful influence over the economy of the 80s it's likely the massive deficit spending.
That said, the link between presidential policy & short term economic changes is universally overstated. The government can cut down basic research funding and the effects won't be felt for a half century.
My point was his policies caused a shift in investment capital away from unproductive tax shelters and into productive investments. Eliminating the tax shelters was part of the deal he made with Democrats to get the budget passed.
That can't help but produce positive economic changes.
Prosperity of the 80s? You mean the era that signalled the end of the post-war golden age of capitalism and brought about hyper-financialisation (which led us to the 2008 catastrophe from which we still haven't recovered) and the decline of tax progressiveness and public services (which supercharged wealth inequality back to gilded age levels)?
Many of our current problems can be traced back to changes which occurred in the 70s and 80s.
Yes, prosperity on GDP numbers, blessed be Its name. Unfortunately not everything is reduced to making line go up.
When you deregulate stuff, the catastrophic results usually don't come immediately. If they were to come immediately, it would be blatantly obvious to everyone that it's a bad idea, and hence deregulation wouldn't happen. So, in practice, most of deregulation happens in areas where it's good for short-term and bad/catastrophic for long-term.
> High taxes always drive capital away into unproductive tax havens.
Citation needed. Show me data that demonstrates that use of tax havens is correlated to tax rates. The data over the last 30-40 years at least at first glance seems to disagree. Tax rates (in particular top income bracket, capital gains and corporate taxes) have continously reduced, while the amount of money in tax havens has increased.
