• Dear People Wishing for Stock Market Trouble

    January 3, 2019 // 19 Comments »


     
     
    Dear People Wishing for Stock Market Trouble:
     
    Stock market trouble will not make Trump go away.

     

    You can have fun posting memes though! He’s owned! He screwed up the one thing he says he’s good at! Rich people will abandon him! Hah hah!

    Any serious downturn in markets will cause more economic inequality. Wealthy people depend on periodic downturns to force middle class people to sell. The rich then buy cheap and wait for the inevitable swing back. They end up owning more stuff, and they got it cheaply.

    About half of all American households own stock, in most cases indirectly through mutual funds, and, more and more via 401(Ks) and whatever company pension accounts still exist. Yet despite that broad base — half of us own something in the stock market — the richest 10% of Americans owned 84% of the total value of the market as of 2016.

    Though those numbers roughly match those of America’s worst period of inequality, the so-called Gilded Age, they are a big change from 2001, when the top 10% owned only 77% of all stocks.

    Today, they have more. You have less. Your part of the market exists because the few wolves need lots of rabbits to eat. You are predator or you are economic prey. Guess where this goes? Think of it as one of those pictures where parallel railroad tracks seem to get closer and closer as they recede into the distance. The theoretical end point is one person owns 100% of everything. But modern wealthy would be happy if .01% owned just 99%, close enough.

     

    In case you missed it, that’s what the 2008 mortgage/housing crisis was all about. Middle class people lost their homes when they could not pay their mortgages. “The banks” then owned those homes and you did not. It took a few years and most prices started back up. You in turn now rent from someone who now owns those homes.

    The inequality of net worth, after almost two decades of little movement, went up sharply from 2007 to 2010, and relative indebtedness for the middle class expanded. The sharp fall in median net worth and the rise in overall wealth inequality over these years are traceable to the high leverage of middle class families and the high share of homes in their “portfolio.”

    What that means is middle class people have most of their net worth embedded in their homes, but see most of that “worth” is actually debt (leverage.) When times get tough, they may lose the home because they can’t pay the debt. People rich enough to spend money in downturns buy up those homes. They have extra money to ride out the tougher years until the government bails out the markets like Obama did in 2008. Same story for the stock market.

     

    It gets worse, because you get money by working for wages. Rich people get money through capital gains, basically stuff they buy cheaply becoming worth more over time. That’s why the downturn is bad for you, ultimately good for most of them. It is math!

    If you like math with letters in it, it is written as R > G. All explained here if you want to understand precisely why you are going to be poorer. And as a bonus, be sure to note the part about how in the U.S. wages are taxed at a higher level than capital gains. You can never have too many advantages.

    Note also that until slavery was ended in the United States, human beings were also considered as part of capital. Meanwhile, because rich people pass on their wealth to their relatives, the children of rich people are born rich and unless they get really into hookers and blow, will inevitably get richer. They almost can’t help it. The gap between the 1 percent and the 99 percent must grow. This will create the society reminiscent of the pre-Enlightenment past we are in the early stages of now. You know it from Jeopardy! as “feudalism.”

     
    Downturns are a huge sucking, a redistribution of wealth upward. You’re basically fucked in this process. Poverty is ennobling, so you do have that. Have a nice day!

     

    BONUS: I wrote a whole book about this called the Ghosts of Tom Joad but few people wanted to read it, so this is all kind of a fun secret between us.

     
     

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    To Hell with It, South to Double-Down on Slavery (Satire)

    June 27, 2015 // 2 Comments »

    redneck-car


    Noting that it has been a really bad week for bigots, the South decided the only answer is to double-down.

    “In one lousy week, everyone is taking down the Confederate flag, gays can now get married and people — even the blacks — can buy that Obamacare. It has just not been a good one for us. I even heard Cracker Barrel and Waffle House are switching away from trans-fats,” said spokesbigot ‘Clem’ (who isn’t sure that’s his real name.)

    “So what do you do? You fight back! The South will rise again!” shouted a second spokesredneck, letting out both a loud fart and a rebel yell from the broken down barco-lounger on his dilapidated front porch he could not rise from due to weighing 300 pounds and thus having to dress in a large Hefty bag.

    “Fighting back” in this instance is taking the form of actual slavery.

    “While it didn’t work out in the long game with Africans, oh, excuse me, ‘African-Americans,’ we want to try it again with other white people. We intend to enslave each other, kind of top and bottom, or least that’s what I heard. Or maybe it was on the online; Jeb just bought him a new modem for the AOL. Anyway, we’ll preserve the great Southern heritage and culture of dehumanization, narrow-mindedness and hate the only way we can at the present time, with white slaves.”

    “There are some details. First, we’ll need to come up with some good racial slurs to refer to each other as. The lame Supreme Court took away our good ones, so that’s a big issue right up front. Next, there is finding enough whites to be the slaves. We have a bunch of the good old boys down here wanting to volunteer, but we are also looking overseas, maybe to one of those European countries with a debt problem, to see if we can harvest some there. We’d kind of like to stick to the traditional way of bringing the slaves in by old-timey ships. Might attract some tourists, too.”

    “As for our manly essences, we will still spill them in service to the Lord’s decree that we reproduce. But if the Supreme Court wants us to be ‘fair,’ well, nobody is gonna be allowed to get married. We’ll do it in line with our culture, the way it has always been done: with our animals, our cousins, and our slaves.”

    “The government thinks it can take away our freedom to take away other people’s freedom, but we intend to show them.”




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    Posted in #99Percent, Democracy, Economy

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