patrick.net

Reality says

Don't confuse money with Real Capital in a fiat money system

Nobody is confusing anything except you.

The separating of fiat money from other forms of capital (Real Capital) is an important first step towards understanding what's really going on.

Counting money as part of capital worked during the era of market money, but not during out current fiat money era, especially when talking in the macro sense for the economy as a whole.

Reality says

"Hoarding of cash" is supposed to be irrelevant / cured in a fiat money system.

Fiat money system discourages hoarding, but when inequality gets to current levels, there's not much that can be done.

Reality says

Looks the like the real problem is glut of money keeping unsustainable businesses in business reducing industry profitability (too much competition from marginal players driving down product/service prices while driving up input factor costs) while letting the financial industry collect a tax on other industries' revenue stream via debt service payment from the marginal players.

Nope. As I already showed you, industry profitability is high. The problem is lack of demand because of inequality.

You were counting money as capital then telling people not to confuse capital vs. assets. Talk about confusion!

Reality says

The separating of fiat money from other forms of capital (Real Capital) is an important first step towards understanding what's really going on.

Counting money as part of capital worked during the era of market money, but not during out current fiat money era, especially when talking in the macro sense for the economy as a whole.

What's really going on now is quite simple to understand and requires that money be counted as capital. That way it is easy to see that there is obviously NOT a lack of capital.

Your terminology only serves to confuse--which is undoubtedly why you use it.

Reality says

You were counting money as capital then telling people not to confuse capital vs. assets. Talk about confusion!

huh? What are you talking about now? Next time why don't you include my post when you answer it? That way you can't misquote or mischaracterize what I said.

Nonsense. If hoarding of cash were the problem, Ben ' s helicopter would have solved the problem. But it did not. The real problem is the fiat money system can only create money, but can not create Real Capital. The more money it prints, the more Real Capital is destroyed due to the distortions the new money creates.

No, you did not show industry profitability. You showed corporate profitability rise, which not only skew towards large mature players (only counting corporations, not sole proprietors or partnerships) but also heavily skewed towards financial industry because that particular industry is far more volatile than other industries due to leverage.

Comment 22 from you "don't confuse capital with asset."

I'm using a phone, it doesn't do quotation on this site.

Reality says

Nonsense. If hoarding of cash were the problem, Ben ' s helicopter would have solved the problem.

Unfortunately, that's not the case. It wasn't nearly enough, it didn't get to the right people, and it didn't reduce income inequality. Until the bottom 50% get some cash, the problem won't be solved.

Reality says

No, you did not show industry profitability. You showed corporate profitability rise, which not only skew towards large mature players (only counting corporations, not sole proprietors or partnerships) but also heavily skewed towards financial industry because that particular industry is far more volatile than other industries due to leverage.

That's correct. And you can feel free to post something that shows industry profitability is low.

It is already statistically shown clearly that the helicopter money landed far more on the top 0.1% than the rest 99.9% combined. Yet, you say that was not enough helicopter money

Talk about an ideological / religious blind spot.

The idea that the a small group of people having a monopoly on something can result in a more equitable distribution of that something than a free market place can do is patently false. You may as well believe in the Divine Right of the FED.

The dearth of profitable opportunity in the economy is shown by the low interest rate. I thought we already agreed on that.

Reality says

It is already statistically shown clearly that the helicopter money landed far more on the top 0.1% than the rest 99.9% combined. Yet, you say that was not enough helicopter money

Talk about an ideological / religious blind spot.

Wow--did you read this part of the post?

tatupu70 says

it didn't get to the right people

Reality says

The idea that the a small group of people having a monopoly on something can result in a more equitable distribution of that something than a free market place can do is patently false. You may as well believe in the Divine Right of the FED.

Well, we know that an unregulated free market will result in wealth moving upwards. That is well established. I'm not sure who you mean in your cryptic start to the quoted passage, but a well regulated market will result in less inequality.

On the contrary. The dearth of sustainable profitable opportunity outside the financial industry is due to:

1. Too many marginal players are kept in the industries by cheap money, resulting in low product / service prices. BTW, that explains the "deflation" in manufactured goods / services while massive inflation in financial assets prices.

2. Tax and regulatory uncertainty.

You can look up the income and net worth rise of the top 0.1% over the past few years vs. The rest 99.9%

Free market allows capital destruction, whereas government regulators tend to help entrenched players at the expense of the upstarts.

It is no co-incidence that almost all the top banks today trace their origin to the late 19th and early 20th century, whereas the earlier giants had been crushed by the earlier episodes of creative destruction. The FED was founded in 1913.

The Great Recession was actually doing a good job leveling the field, massively reducing the wealth of many a top 0.1%, until the government stepped in to save them at the expense of the rest 99.9%

Reality says

The Great Recession was actually doing a good job leveling the field, massively reducing the wealth of many a top 0.1%, until the government stepped in to save them at the expense of the rest 99.9%

Yep.

19th century saw many large fortunes made and destroyed.

20th century saw dynastic families having made their fortune trying to engage in politics in order to keep their offsprings wealthy and powerful. E.g. the Kennedies, the Bushes, etc..

That is actually the common pattern throughout history for most of the rest of the world: family wealth through commerce is way too easily made and lost in 2-3 genrations. Wealthy families sought political privilege to keep keep wealth and power for their offsprings.

Without the FED and government bailouts, many of the wealthy, including even Warren Buffet, would have lost the bulk of their fortune.

The wealthy are far more leveraged than the poor. The poor who can only rent and not buy house don't have much collateralized debt, whereas the typical wealthy had/have plenty. If the prices kept going down, the process would have significantly leveled asset disparity in this country and enabled people to buy their own homes cheaper.

Did you not notice, those 19th century super wealthy were largely self-made men who seized opportunity and delivered valuable service . . . And after they were gone, their fortune more or less faded away . . . Except for those who wedded their dynastic families to the government and the FED.

LOL, Eisenhower, Nixon and Ford were Democrats, only in your duck world.

I did not change the subject. You were the one who brought the list of superwealthy.

Of course the superwealthy gave plenty. Yet there were plenty left over to the offsprings. However, the free market ensured that competition would whittle away at the inheritance . . . Which also contributed to the patriarchs understanding how pointless it would be to pass the entire fortune to offsprings.

Contrast that with the 20th century and now: seems the post-FDR era has given people a sense that it is the government's responsibility to take care of the poor, while it is the parents' responsibility to leave as much as possible to the dynastic wealthy offsprings.

Just like the Republicans controlled the Congress while Truman was president and Carter was president. That's just the American voters' wisdom to keep them in check and balance, unlike your partisan silliness.

Here is a common saying:
If your vote is in someone's back pocket, you will be sat on :-)

1. Despite the much greater (relatively speaking) fortunes made in the 19th centuey, those big fortunes typically went away after the death of the founders in the absence of government institutions entrenching dynastic wealth, unlike in the 20th century. Whether the eventual dispersion was due to the patriarchs giving away, lost it to competition or offsprings whittle away is irrelevant: all three led to social mobility. The patriarchs giving away could easily be motivated by social mobility making dynastic wealth impractical to maintain, unlike the 20th century after the FED founding. If you insist on an example of a great banking fortune lost to competition in the pre - FED era, one easily coming to mind was the Knickerbocker Trust. Of course you are probably too ignorant to know what it is without googling.

2. You are putting your ignorance on display when claiming the Democrats controlled the US Government from 1946 to 1980. In case you did not notice, Democrats were so hopeless in 1952 that Truman refused to seek re-election; same thing happened to LBJ in 1968. Even the 1960 election can be argued that JFK' s father bought the election by having Chicago mobsters vote on behalf of many dead people to capture Illinois and steal the election. Nixon was too afraid of Kennedy's dynastic wealth to seek recount. The Democratic Party was in existential crisis after the 1972 election as Nixon won by landslide. Only the Watergate scandal brought Democrats back to life, even then only a one termer before Reagan again won by landslide!

3. You ar once again putting your ignorance on display by claiming the late 1970 ' s as some kind of happy time. The "Misery Index" was a term invented during the Carter years! Runaway inflation in the mid-teens plus double-digit unemployment. The Keynesianism and Phillips Curve nonsense were abandoned only because they were shown to be thoroughly mistaken in real life! You sound like a 20 or 30-something year old too young to remember what happened back then; possibly a paid shill.

4. Your content-free personal attacks only show your desperation.