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The Almighty Buck Businesses

'The Second Gilded Age Is Upon Us' (theguardian.com) 509

Robotron23 writes: Wealth inequality is at its highest since the turn of the 20th century -- the so-called 'Gilded Age' -- as the proportion of capital held by the world's 1,542 dollar billionaires swells further. The report, commissioned by the Swiss banking giant UBS and UK accounting company PwC, discusses the impacts of technology and globalization on the situation, and arrives weeks after the IMF recommended that the world's richest pay higher taxes to ease the disparity of wealth.
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'The Second Gilded Age Is Upon Us'

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  • it can only end well.

  • ENOUGH. Time to roll out the goddamn guillotines. They will never release control with out a fight. This economy has and culture have taken so much from all of us. If it comes down to blood in the streets so be it. My life sucks already. Knuckle up Daddy Warbucks - it's clobberin' time.
    • by Baron_Yam ( 643147 ) on Thursday October 26, 2017 @02:47PM (#55439353)

      The uber-rich really are selfish and shortsighted. Selfish I understand, but the shortsightedness is ridiculous. No matter how nice the masses have it (and at least where I live, you have to be pretty poor before you're not 'rich' in a global or historical context), when a relatively small number of people have so much wealth they can buy and sell the rest of us without a care in the world... the masses will eventually revolt.

      And it's so stupid, because the uber-rich are wealthy on the backs of a society that runs on the poor, managed by the middle class. They wouldn't be rich at all without everyone else doing their part. And they are so rich it's nearly impossible for them to lose enough to become one of the commoners again no matter how badly they screw up.

      Unless you believe they were born better than you by divine blessing, you have to see how ridiculous the current wealth disparity and distribution is.

      The problem with trying to fix it is that much of their wealth is liquid, transferable, and fairly easy to disguise; unless we can get every nation in the world to tighten their taxation laws at the same time and in the same way, whoever acts first simply sees wealth hidden a little more carefully, or watches it bleed away to somewhere with more favorable regulation.

      • Re:Guillotine time. (Score:5, Interesting)

        by Kjella ( 173770 ) on Thursday October 26, 2017 @03:53PM (#55439985) Homepage

        The uber-rich really are selfish and shortsighted. Selfish I understand, but the shortsightedness is ridiculous. No matter how nice the masses have it (and at least where I live, you have to be pretty poor before you're not 'rich' in a global or historical context), when a relatively small number of people have so much wealth they can buy and sell the rest of us without a care in the world... the masses will eventually revolt.

        Sorry, but I don't think history supports that claim. The peasants didn't revolt because their lords and kings were rich and powerful, almost every revolt came when there was a crisis that drove the lowest in society to desperation. The French revolution? Oppression + food shortage. The Russian revolution? Tired of war + food shortage. Even the fall of the Soviet Union was mostly because the stores were empty and the rubles almost worthless. That Roman that coined the term "bread and circus" was mostly spot on, as long as you got food stamps and TV most people are placated.

        Take a look at all the people who quite willingly vote for a "strong leader" because they don't really care about freedom or civil rights, they want a strong economy and order. As long as they can make some money (bread) and spend that money (circus) without too much interference they're happy to be a cog in the machinery. Take a look at China, I know everybody here wants to remind about Tiananmen Square but it's 25+ years ago and in a booming economy the masses just aren't remotely unhappy enough to support a revolution. Venezuela, maybe. But it's increasingly rare.

    • by Oswald McWeany ( 2428506 ) on Thursday October 26, 2017 @02:50PM (#55439381)

      Guillotines serve no purpose. If you look at what happened in France, you just got a different type of tyrant, a far more dangerous one running the country. Same happened in Russia.

      Chopping off a nasty head doesn't mean you'll get a nice new one. We do need change but it shouldn't come with a sharp blade.

      • by AmiMoJo ( 196126 ) <mojo@@@world3...net> on Thursday October 26, 2017 @03:25PM (#55439721) Homepage Journal

        The French Revolution was far from perfect, just like the English Civil War, but it definitely changed things for better. Democracy doesn't just spring forth fully formed, it takes a long time to get right and guillotines are just the first step.

        • Re: (Score:3, Insightful)

          by werepants ( 1912634 )

          The French Revolution was far from perfect, just like the English Civil War, but it definitely changed things for better. Democracy doesn't just spring forth fully formed, it takes a long time to get right and guillotines are just the first step.

          I have to disagree here. The American revolution was carried out primarily by practical, science-minded thinkers who just wanted their interests represented. The French revolution was carried out by romantic philosophers who turned on each other and executed the rich, the poor, and anybody who dared to question their flawless ideology. We ought to look to Ghandi and Martin Luther King Jr. for inspiration on reforming unjust political systems without substituting a more unjust one. When you introduce mob exe

      • by Shotgun ( 30919 )

        Well, a survey of history will reveal that revolutions do not make things better for the average person, they just make the average person feel better about things. (At least according to the person whose name I can't remember.)

      • We do need change but it shouldn't come with a sharp blade.

        No, definitely not; the only way we're going to bring about change is with compassionate, nonviolent patience... fortunately, there are free speech zones within which we can apply these strategies...

    • I posit it's parasitic, not trying to kill the masses. The rich understand this!
      Keep the masses alive juuuuuuust enough to get by, and miserable enough to keep working hard, pissed about whatever DemoPublican is on the TV, or cultural or moral issue has been put out there. keep them quiet with sports and media.
      Meanwhile, the dollars keep floooowing in.
      The only way to stop them is similar to what was in The Greening of America and the Luddites: Stop working for the machine and it grinds to a halt. Problem is

    • Re:Guillotine time. (Score:5, Interesting)

      by swillden ( 191260 ) <shawn-ds@willden.org> on Thursday October 26, 2017 @03:39PM (#55439869) Homepage Journal

      They will never release control with out a fight.

      What do you base that on?

      The comparison with the Gilded Age is apt, I think. The Gilded Age was the culmination of the weath concentration effect of the Industrial Revolution. Large changes in technology create massive increases in productivity, and when that happens most of the benefit accrues to those in the best position to grab it, which is the founders of the companies enabled by the new technologies and the existing owners of capital. This is what we saw in the 19th century and into the early 20th, and it's what we're seeing in the late 20th and early 21st centuries.

      But, guillotines weren't needed to end the Gilded Age, and I see no reason why you think they're necessary to end the new gilded age. Market forces have done the job in the the past and (with two caveats, which I'll get into below), I see no reason to think they won't do so again.

      What happens is that as the new technologies and new production methods get established, they become commoditized. When that happens, consolidation reverses and competition builds. Competition among equals drives tight profit margins and pushes wages up, since the competitors are using similar processes and workers have portable skills that can move between them (individual bargaining). In addition, as job roles become more well-defined, collective bargaining makes more and more sense.

      The two caveats are both ways in which this time may truly be different. The first is the way that automation, especially strong AI, when it is finally achieved, has the potential to eliminate not just some jobs, but nearly all of them. In theory, there's nothing that humans can do that robots cannot except, perhaps, be human. So it's possible in the most extreme outcome (well, the *most* extreme outcome involves the robots getting rid of the humans, but we'll ignore that one) the only jobs left are service jobs, because people like to be served by people. Less extreme outcomes could still see us in a post-scarcity world where very few people are needed to work.

      IMO, the effects of that caveat do not require guillotines. It will become obvious that there is both a huge surplus of labor and a surplus of production, and the answer will be to tax the owners of the automated production systems to fund a generous basic income -- and then figure out how human society adapts to a life of nearly 100% leisure. As long as the voters are in control that's what will happen. And voters are in control. All of the lobbying in the world is useless in the face of sufficiently-focused voters, and massive unemployment and underemployment will motivate the voters.

      The other caveat is that several of the new Internet Age wealth concentration machines (including the one that pays my bills) seem to benefit enormously from network effects. For example, it's very difficult for multiple players to compete in the social media space, because everyone wants to be where all of their friends are. We have some fragmentation in that space, but it's fragmentation more than competition, because the "competitors" are all occupying different niches. There's some room for competition in search engines, ad networks, mobile operating systems, etc., but there's also a strong tendency towards consolidation that I don't think we've seen before. Online retail seems powerfully biased towards a single competitor model.

      My opinion is that this second caveat also does not require guillotines. I think there are enough different areas, and I think enough consumers are sufficiently uncomfortable with doing everything with one company that enough diversity will be driven, and enough competition will exist. If necessary, we may need to enact legislation to impose some limits that consumers don't impose through market means. Time will tell.

      Bottom line; I see no compelling reason to believe that this time is different in any way that requires violence.

      • Re:Guillotine time. (Score:4, Informative)

        by Coryoth ( 254751 ) on Thursday October 26, 2017 @09:28PM (#55441781) Homepage Journal

        But, guillotines weren't needed to end the Gilded Age, and I see no reason why you think they're necessary to end the new gilded age. Market forces have done the job in the the past

        Market forces did not end the Gilded Age, it was ended by two world wars and significant inflation (in part for countries to pay of debts from the wars). These were major shocks to accrued wealth globally, breaking apart, or inflating away the value of, most family fortunes. Sure there were no Guillotines, but I don't think we want to go through the disasters of the 10's , 30's and 40's again just to get some wealth distribution back.

  • by Joe_Dragon ( 2206452 ) on Thursday October 26, 2017 @02:39PM (#55439279)

    more unions are needed!!

  • by Anonymous Coward

    Trump and his proclamation that he's for the working person and the riots - whatever they are: Atnifa, BLM or whatever are just symptoms of the social unrest that occurs when inequality gets too large.

    That's all. The platitudes of "work harder", "take risks" or "don't major in Russian Medieval Literature" does shit for for the poor bastard who majored in Computer Science at State and the best he sees at the job fairs is jobs that require you to ask, "Have you tried turning it off and then on?"

    When folks w

  • To paying down massive government debts or hand outs to the poor?

    • by sjames ( 1099 )

      Infrastructure, affordable healthcare, not collecting income tax from people who earn less than even the average income, etc.

      • Infrastructure, affordable healthcare, not collecting income tax from people who earn less than even the average income, etc.

        If only that where true...

        Eventually, if we don't do something about this by either growing the economy or cutting spending, all those taxes you collect will not buy enough ink and paper to print the money you will need to pay interest on the debt...

        When that happens, what's going to be the plight of the poor?

    • One man's handouts (Score:5, Interesting)

      by rsilvergun ( 571051 ) on Thursday October 26, 2017 @03:09PM (#55439557)
      is another man's justice. Most wealth comes from two sources: Natural resources and scientific discoveries. The ruling elite claim both simply by virtue of being present when they were first discovered. When our managers do this to us we get pissed off. Not sure why it's OK when rich elites do it.

      Besides, study after study shows that unless you're willing to do some really nasty shit (death squads and the like) then taking care of your working class saves more money. Crime rates drop when people have heath care. Productivity goes up when folks aren't living paycheck to paycheck. And it takes desperation to put a man like Mao or Stalin in power, so it even stabilizes your politics and prevents out of control government oppression.

      Of course, if you're actually OK with all that oppression so long as it doesn't happen to you and yours then that's another matter all together. What was that old line? "Do what thou wilt shall be the whole of the law". But you'd never actually come out and admit that, would you?
      • by jandrese ( 485 )
        You forgot about the primary source of wealth: wealth. If you have money you can make money with it. That's a feature of capitalism, but also one of it's flaws. Because money begets money wealth will naturally concentrate at the top and drain from the bottom. Eventually the system becomes too top heavy and collapses. That's why capitalism doesn't work in the long term without a strong government willing to drain wealth from the top and re-inject it at the bottom.
        • But even if you're at the "bottom", you're probably spending money at Starbucks or something like that. Instead, invest that in your 401k or even CDs or dividend paying stocks FOR A LONG TIME.. and you will have more money than you had beforehand.

          • by chadenright ( 1344231 ) on Thursday October 26, 2017 @05:08PM (#55440543) Journal
            If you're spending money at starbucks and investing in a 401k, then you are not at the bottom. Entitled comments like this show 100% why the wealthy -just don't get- the situation they're in. When people tell mattack2 that they are starving, his response is, "Let them eat cake!"
    • by jandrese ( 485 )
      How about funding infrastructure projects? Rail lines. Bridges. Roads. Schools. Parks. Trails. Basic research. The stuff that not only pays dividends in the future, but employs people in the present, injecting capital back into the bottom of the system where it does the most good.
    • by Moof123 ( 1292134 ) on Thursday October 26, 2017 @03:29PM (#55439771)

      Debts: Yes, the rich have the ear of congress and certainly played a role in oil related debacles like Iraq, and Revenge of Iraq. As such the rich should help foot the bill better for the overseas adventures they helped instigate and profited from. Much of the debt is due to tax cuts that mostly went to the rich in the past, so maybe it is time for the chickens to come home to roost.

      Hand outs to poor: If you mean decent funding for public schools, fixing roads and bridges, having good job retraining and income replacement to those who lost jobs to off shoring, then yes. We need much more money spent to keep our nation and its workforce maintained. I would like to see the rich who can most afford to pay higher taxes and whose businesses benefit from well trained job applicants help foot that bill.

  • by ThisIsNotAName ( 2880693 ) on Thursday October 26, 2017 @02:50PM (#55439379)

    I should write a cookbook!
    I'll call it "100 Recipes for Cooking Rich People!"
    It's brilliant! Everyone will spend their last few dollars to buy it!
    I'll be rich!!! ... Wait, never mind.

  • According to the report, the main thing that's changed is billionaires in Asia. So the communist country of China is turning out billionaires like there's no tomorrow. Good for growth, I guess. To each according to his need.
  • by WrongMonkey ( 1027334 ) on Thursday October 26, 2017 @02:57PM (#55439447)
    Just because there are numbers in a computer doesn't mean that those numbers translate into material wealth. Remember Elizabeth Holmes? Her net worth went from $4 billion to zero in a blink of an eye. Was her wealth ever real in a material sense? Are any of those net worth numbers actually real?
    • Citation needed (Score:5, Insightful)

      by rsilvergun ( 571051 ) on Thursday October 26, 2017 @03:04PM (#55439521)
      Liz Holmes got where she got because of connections. Just because her company lost it's value doesn't mean she's out on the street. She was the CEO of a $4 billion dollar startup that appears to have been a scam. She would have drew a multi-million dollar salary for years until somebody noticed it was all B.S..

      Bill Gates didn't work his way up from nothing. Donald Trump never really went broke. Only the poor and working class have to worry about collapsing into poverty. The elites take care of their own. I sure wish the rest of us yahoos did.
      • Of course she's not out of the streets. But the actual number assigned to her net worth was a fiction. Out of the 1,542 other billionaires, how many of them have all or part of their net worth based on similar fictions?
        • None of them (Score:4, Insightful)

          by rsilvergun ( 571051 ) on Thursday October 26, 2017 @03:48PM (#55439945)
          have lost all of their net worth. Not a one. They've lost some paper money that had little or no impact on their quality of life. They've lost some power, some of the ability to make politicians and workers dance to their tune. But they've never really lost anything. They've never lost their only home. They've never had to choose between food and medicine for their kids. They've never looked at their mounting debt and wondered if they'll make it, because they always know that bankruptcy law will protect them (any anyone else with more than $100k in debt, which is the cut off where you can't discharge).

          Are you actually this naive or do you work for them shit posting to shut down progress?
    • Just because there are numbers in a computer doesn't mean that those numbers translate into material wealth. Remember Elizabeth Holmes? Her net worth went from $4 billion to zero in a blink of an eye. Was her wealth ever real in a material sense? Are any of those net worth numbers actually real?

      A simple question with a very complex answer.

      At the root of it, wealth is having something other people desire. Elizabeth Holmes supposedly had technology that many other people wanted. It turns out, she was lying. Therefore, the demand for her "product" disappeared.

      People's desires change over time in an unpredictable fashion. That's why it's a good idea to diversify your wealth. [wikipedia.org] You avoid getting burned by what's trendy.

  • My observation is that wealth transfers are focused on the poor while the middle class gets little relief thus the gap between middle class and poor shrinks. Already in many states it makes more sense to be on welfare than work (citation below). Between the subsidized health care, no-copay medical, free phones, free food, and other perks the poor may on paper make less than the middle class yet really do as well or better. Meanwhile the 1% soar ever higher because once you have all the money you need the
  • What about just ensuring that people get their fair share [johnmoserfoncongress.com]?

    A fair wage, fair hours, and a fair share. Once again, we must offer the American people a new deal [johnmoserforcongress.com]; Hell, it's about time!

    • Welp my fault for clicking through the preview. People really must get their fair share [johnmoserforcongress.com], though.

    • by Shotgun ( 30919 )

      Because "fair" is a politician's weasel word that cannot be given a proper definition that even a majority can agree to on a universal basis?

    • electing a congress critter won't give anyone a "fair share" of anything nor a "fair" wage

  • Wealth vs. Income (Score:5, Interesting)

    by Darlok ( 131116 ) on Thursday October 26, 2017 @03:02PM (#55439503)

    The problem that so many of these initiatives have, when it comes down to IMPLEMENTATION, is that governments have a major problem with "wealth" as distinct from "income". Because wealth can be hidden, obfuscated and invested in so many ways, most give up trying to tax it by traditional means. So they focus on Income.

    And there's a HUGE problem there, because income != wealth. At least, again, the way most governments choose to define "income".

    I'm a small business owner, and when I get my K-1 every year, it never ceases to amaze me about the spread between how much money I'm being taxed on, versus how much money I took home. Technically, if I were to somehow, magically, close up the company without any spin-down expenses or other costs, I could capture that money and be "rich". But, in reality, the amount of money sitting in the company for expenses, payroll, etc... that is "mine", but I will never see, touch or capitalize on, is significant. So every time you talk about taxing the "rich", you're taxing guys like me who run mid-sized businesses, and are personally allocated a share of the company's earnings, THAT WE HAVE NEVER TAKEN HOME, AND NEVER WILL.

    Tax policy is a steaming pile of dung. I'm all for taxing the truly rich... likely because I pay more taxes than most of them already!! But you need to be very careful about how to define "rich", because more often than not, these "tax 'em all and let god sort 'em out later" plans end up netting and hurting small- and mid-sized business owners more than it does the truly-Wealthy.

    My $0.02...

    • by DogDude ( 805747 )
      I'm in the same boat. My personal taxes are always significantly more than I take home every year. My tax bill actively encourages me NOT to reinvest in my own business. It's pretty messed up. And yes, you'll only get that equity back if you successfully sell the company. Good luck with that!
    • But why are the numbers so different? That's a serious question.

      Can't you take deductions for the company's expenses over the year? Don't you only pay taxes on profits?

    • What taxes are you paying on money written down as expenses? If things you might buy are dual-use (cars, computers, etc) why arenâ(TM)t you buying them through your company and making them company assets that are written off?

      Youâ(TM)re paying taxes on your net revenue, not gross. If youâ(TM)re not taking advantages of tax breaks and write-offs, which exist specifically to ease tax burdens on small businesses, youâ(TM)re just screwing yourself.

      Unless youâ(TM)re no longer actually a s

    • by eriks ( 31863 )

      Though I run a *tiny* business, so am not really in the same boat exactly, I understand what you mean, however there is a *very* simple solution: set a high tax rate on *actual individual income* above $500,000 or so -- since there's literally no one that needs more than that to live on, and it's above that level where the obscene levels of wealth concentration are happening. Then give the (actual) small businesses a break.

      If a business grosses 5M, but the owner(s) only pay themselves $250k after payroll, e

    • by GrumpySteen ( 1250194 ) on Thursday October 26, 2017 @04:37PM (#55440319)

      more often than not, these "tax 'em all and let god sort 'em out later" plans end up netting and hurting small- and mid-sized business owners more than it does the truly-Wealthy.

      Good news! There is absolutely no sign of "tax'em all" in Trump's current tax plan. The truly wealthy and large corporations will enjoy huge tax cuts (quite probably at your expense), but it definitely isn't anything that could reasonably be described as taxing everyone.

  • by Dallas May ( 4891515 ) on Thursday October 26, 2017 @03:20PM (#55439671)
    Wealth inequality of the 1% is not a problem so long as the 99% are taken care of too. Not everyone needs their own private jet. So long as a family can buy a house, a car, put their kids through college and pay for health care -basically cover their needs and have a few luxuries too, that family shouldn't care that some other family has a castle in the south of France. And that family is not going to care. And that's fine. Where the problems will start is when a sizable portion of the population CAN'T afford their basic needs. That's how people like Trump gets elected.
    • by dwpro ( 520418 ) <dgeller777@[ ]il.com ['gma' in gap]> on Thursday October 26, 2017 @05:14PM (#55440583)
      Life is about a lot more than meeting basic needs, though that's certainly required. The social contract is predicated on a level of fairness, and there's only so much pay-to-win that the masses will put up with before they decide to flip the table. I'd argue the reason Trump won wasn't affording basic needs. It was the sentiment that everyday folks weren't getting their say in the government, and were ready to throw a grenade in it rather than put up with the status quo.
  • It's paper wealth. If your capital pays dividends or other income you're OK. If not, you're at risk of having it decline in value.

  • by Crypto Gnome ( 651401 ) on Thursday October 26, 2017 @04:18PM (#55440171) Homepage Journal
    the issue with taxes is NOT that there aren't sufficient or high enough taxes on the rich.

    The REAL issue is that when you have enough money, legally avoiding taxes that would otherwise need to be paid is both easy AND financially worthwhile.

    As governments have RECENTLY realized in the circle of International Megacorps.

    The Appallingly Rich do NOT need more taxes , they do NOT need higher taxes, they just need less "get out paying taxes" opportunities.

    http://www.azquotes.com/author/2136-Warren_Buffett/tag/taxes

    While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks.

  • by werepants ( 1912634 ) on Thursday October 26, 2017 @04:21PM (#55440209)

    Here's the problem. We're living in a system where the rich are just playing a game trying to score the most points, while people are dying because they don't have enough points to get life-saving health care. The points that belong to the richest players could easily rectify the fundamental stresses of the lower classes.

    Money is not sacred. It's an artificial construct created to facilitate trade and distribution of goods. Taxation is not theft. It is not even about funding the government. It is about destroying money (not destroying wealth, but destroying currency). If we think of money as points and economics as a game, the whole purpose of taxation is to remove points from problematic areas (players who abuse massive collections of points to the detriment of other players) or to dis-incentivize antisocial behaviors that can be used to generate extra points (like using taxation to discourage polluters). You also need to destroy points to balance out the many points in the system where points are being created from nothing - otherwise the value of a point will plummet and you get crazy inflation that causes undesirable imbalances in the system.

    So here's the thing: Americans believe in meritocracy, or at least claim they do. We ought to have a society that allows successful players to be rewarded for their contribution, and that still allows unsuccessful players to have their fundamental needs met, even if at a reduced capacity. It's pretty simple to see that you rectify this imbalance by removing points where you don't really need them (from people that already have more than they can ever use) and adding points where they can do the most good.

    Let's get rid of this ridiculous concept that money is the most sacred thing in life, and get back to things that actually matter: liberty, for starters. Our broken economy is needlessly depriving people from their fundamental right to life, liberty, and the pursuit of happiness. We have the resources as a society for all people to have access to decent health care and education, and only a rigid ideological attachment to an arbitrary government construct is keeping us from correcting the system.

  • by MrKaos ( 858439 ) on Thursday October 26, 2017 @05:56PM (#55440829) Journal

    This is what happened in Germany just before the Nazis rose to power - massive wealth inequality.

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