Wealth Distribution in the United States

https://www.righto.com/2024/10/wealth-distribution-in-united-states.html

by ssklash • 2 years ago

84 108 2 years ago

h2odragon2• 2 years ago

Could the richest people liquidate holdings for the value Forbes estimates their worth at? I doubt it.

Is it possible that the people figuring up "wealth" for these articles have multiple reasons to exaggerate the totals? Perhaps outweighing their impulses towards scientific and journalistic credibility?

beardyw• 2 years ago

I'm not sure what divisor you would apply which would reduce the impact of that chart?

ryuhhnn3• 2 years ago

https://github.com/MKorostoff/1-pixel-wealth/blob/master/THE...

dingnuts• 2 years ago

The author argues that when people say "billionaires can't sell their holdings" that they mean "instantly" and that's not true because they can sell their holdings slowly, and then the author argues that this won't affect the price of those assets because they represent a small amount of the value in the total market.

This is not a serious argument. You're telling me that if shareholders see a founder divest entirely from their companies, they aren't going to take that as a bad signal, and also choose to divest? Bullshit. The size of the total market is completely irrelevant.

But you know, if this was a serious argument, the author would've been able to have it published SOMEWHERE and it wouldn't just be a gist

Don't know why I wasted my time clicking that link. I knew it would be what it was.

pipes• 2 years ago

This argument doesn't account for would happen to the valuations of those assets once the government decided that it owned a portion of them or started forcing people to sell them. Suddenly they are a hell of a lot more risky, presumably the market would price that in very quickly.

itishappy• 2 years ago

Could the richest people liquidate holdings for the value Forbes estimates their worth at? I doubt it.

Can the other 99%?

quacked• 2 years ago

Yeah, if Forbes estimated all my stuff I could sell it for probably about 10% within what they said.

brk• 2 years ago

Definitely.

Let's say I had all the same holdings as Musk or Bezos, just in much much lower amounts, proportionate to the difference of our net worth.

Use Amazon stock as an example. If Bezos indicates a desire to liquidate his Amazon holdings he has to file paperwork with SEC, and the very act of him selling his stock would impact the price downward. People wondering if he knows something would also start selling their shares, and just the sheer volume would take hours or even days to unload.

If I wanted to divest my proportion of AMZN I would click a few buttons in an online portal. 10 seconds later, my stock would be sold off at the then-current price, and I'd have a cash balance in my account. In the typical hourly trading volume of AMZN my transaction wouldn't even stand out.

Even if my entire net worth, and the net worth of all my closest friends was in AMZN, we could sell it for market price and the transactions would be settled in a few seconds. Nobody would even notice.

antisthenes• 2 years ago

Yes, because the size of the average assets of a person relative to the size of the market is negligible.

This amount of assets cannot meaningfully move the market equilibrium, so the person will realistically sell all of it for 100% of what it's worth, with say a 2% margin of error.

The higher up you go in wealth, the less it is the case. But it's not black and white, just a scale.

ninetyninenine• 2 years ago

Makes sense… lets assume the article is off by 100 percent.

Let’s assume that the article is so off base that it literally got everything wrong by doubling the true value in their estimates which is a completely ludicrous assumption.

This does almost nothing to that graph. The wealth gap is still completely out of this world.

JohnMakin3• 2 years ago

Could the richest people liquidate holdings for the value Forbes estimates their worth at? I doubt it.

Of course, if someone like Elon liquidated his TSLA holdings he'd be worth nowhere near the estimate. I don't think it matters though, because he can use those holdings as leverage for cash that makes him effectively as liquid as his estimated net worth.

aiforecastthway3• 2 years ago

I think you have the correct set of facts but entirely the wrong conclusion.

Would the richest people WANT to liquidate holdings for the value that Forbes estimates their worth at? I doubt it.

The marginal value of millions of dollars to these billionaires' lives is close to zero.

However, those holdings constitute control and power over important institutions at the heart of the power structures of the most powerful country on earth.

I don't care about how much money other people have. But I do care about how much control other people have.

Ergo, I am much more concerned about the power-distribution effect of a few people controlling large stakes in institutions significant to the operation of society, than I am about the estimated dollar value of their stake.

If anything, the hypothetical value of these assets under-estimates the amount of social power for which those dollars are a proxy.

There's a reason billionaires buy money-losing newspapers and social networks.

h2odragon2• 2 years ago

very well said

my only conclusion from TFA is "someone has emitted some horseshit with chunks of numbers in it"

your point is far more central to the discussion i feel the people compiling the figures wanted to spark. And while its a worthy argument i hafta say "why didn't they put it in those terms, then?"

kens4• 2 years ago

Author here if anyone has questions. This is a bit different from my usual posts...

vzaliva2• 2 years ago

Have you tried plotting it in log scale?

byearthithatius3• 2 years ago

Why? So massive differences in wealth look significantly smaller? By graphing this in log scale you are admitting there is an "exponentially growing delta between rich and poor" and log makes it easier to even visualize (which is insane to begin with).

FactKnower693• 2 years ago

oops, this thread's just been censored off the front page, better luck next time

ks20485• 2 years ago

why?

kens4• 2 years ago

Yeah, the "controversial" filter kicked in because the post has more comments than upvotes. I reverse-engineered the HN algorithm a few years ago: https://www.righto.com/2013/11/how-hacker-news-ranking-reall...

Balgair• 2 years ago

Um, anyway for me to put in my money and see where I rank? I'd just love to know how bad things really are.

ks20485• 2 years ago

Have you come cross more fine-grained data of wealth or income data? (i.e histograms with many bins across whole range).

kens4• 2 years ago

Unfortunately, no. Wealth data is usually very coarse (quartiles or quintiles) or one data point, which makes it hard to do most of the analysis that I'd like to do.

Ancalagon• 2 years ago

I thought having a hundred billion dollars was basically unfathomable just a few years ago.

Now I'm pretty sure we will see the first trillionaire in the next decade

dllthomas• 2 years ago

Now I'm pretty sure we will see the first trillionaire in the next decade

Not if we do the right thing and switch to labeling our large numbers using the "long" system. Then they'll merely be back to being "billionaires" (instead of milliardaires) despite having the net worth you were discussing.

Retric3• 2 years ago

It’s worth keeping things in constant dollars for those kinds of comparisons.

In 1999 Bill Gates was worth the equivalent of ~187 billion dollars today. 25 years later Elon Musk is worth ~269 Billion and Zuckerberg is worth ~206 Billion.

None of these guys gets close to the robber barons in terms of share of total assets though.

rootusrootus12• 2 years ago

Yeah I want to say it was Rockefeller who is the richest guy in history. He'd be closing in on half a trillion dollars in today's money IIRC. Perhaps we should rank wealth as a percentage of GDP for somewhat more accurate comparisons.

JohnMakin3• 2 years ago

One astounding thing I realized the other day - if you made $10,000 an hour continuously since the year 0, you still would be about 70 billion dollars off of Elon's estimated wealth.

That said, I don't think people like Elon are actually worth 250 billion or whatever the estimate is, but at that level of wealth, it almost doesn't even matter.

elpocko• 2 years ago

But you could've made $8,879 every 37 minutes instead, making you more wealthy than Elon. Astounding.

josefritzishere• 2 years ago

This is the biggest game of Monopoly ever.

readthenotes12• 2 years ago

The difference is that in real life, the board expands to provide more places to obtain rent and that the players have some control over their moves.

monero-xmr4• 2 years ago

The value of the super wealthy’s net worth is paper. It only has value because we all agree it has value. If you started to seize their paper wealth and give it to everyone else, the value of that paper would immediately fall, not just from the threat of seizing it but their lack of ownership and stewardship would make it crumble.

When someone actually uses their money, like to buy a mansion, we do indeed tax the shit out of it. We tax the corporation, we tax the dividends, we tax the gains, we tax the seller of the property and we make the buyer pay various fees. We tax the property yearly, and we increase the assessed value of it upwards to get more tax every year. Tax tax tax.

The only place to get more tax is to just seize the paper straight. And I think that’s a terrible idea.

cko• 2 years ago

Seizing it would also have the secondary effect of a mass exodus of investment capital from the country, like capital flight in China.

A more reasonable way is to seize it is through taxation, either by a wealth tax or tax on unrealized gains, but it would be very difficult to implement.

JetSpiegel2• 2 years ago

Capital flight to where? The US economy is still the largest in the world, there aren't enough assets in the rest of the world for that capital to buy.

Plus, the US government could just implement capital controls overnight (or better yet, in the night before), then the money would have nowhere to go.

ProfessorLayton• 2 years ago

The only place to get more tax is to just seize the paper straight. And I think that’s a terrible idea.

That's not true, right now there's lots of incentive for the ultra wealthy to not sell their stocks, and instead use the buy/borrow/die strategy. This results in less tax revenue, allows them to capture gains, and can then pass down that wealth on a step-up basis that wipes out capital gains for the recipient.

Policies could be changed to incentivize selling assets without actually seizing them.

zer8k• 2 years ago

The value of the super wealthy’s net worth is paper. It only has value because we all agree it has value. If you started to seize their paper wealth and give it to everyone else, the value of that paper would immediately fall, not just from the threat of seizing it but their lack of ownership and stewardship would make it crumble.

I don't think ownership and stewardship is the problem. The fundamental problem is still there: whether they have 1T dollars, or 300M people have their share of 1T dollars, the dollars in the system will increase the second they spend it. Their "stewardship" is a tenuous position - commanding enough capital to cause massive inflation. Politics aside, it's lose/lose for a single person to command that much power over an economy. If every billionaire decided to liquidate their assets all at once the financial system would absolutely fold. The fact these people can accumulate this level of wealth is not only an income equality problem but a symptom of a cancer in our financial system. The Fed's policies and the existence of lobbying have, by and large, created these people. It's less a money problem but rather a political problem.

I agree with you that the idea of charging capital gains on unrealized capital is financial and political suicide. Even if you suppose you only do this for people worth, say, 500M or more history has shown that this never sticks. Eventually, the government will continue to get more hungry and continue to make abhorrent financial decisions. Eventually, it will effect everyone. As you stated, the investment from regular people over the next 30-50 years would trend towards 0 - and then a new way to tax would need to be made. Negative interest rates on bank accounts, perhaps.

That's not to say however it's ok that these people are allowed to possess >= 80% of a countries net wealth. The money isn't the problem is the power it brings - and that's a huge problem. The safest way is probably a progressive inheritance tax but it still has the same problem. How long before Joe Plumber is effected by it? 50 years? There's no simple solution.

monero-xmr4• 2 years ago

The government has a monopoly on violence, and it can (and does) print as much money as it wants. There is no "threat" of a private person having money, they are still bound by the same laws. They became rich by creating a business that provided value for others - the most noble way to acquire wealth that exists. That's not a danger or a cancer of the system, that's a success

rootusrootus12• 2 years ago

If every billionaire decided to liquidate their assets all at once the financial system would absolutely fold.

Would it? Or would it come roaring back stronger than ever? If there are real assets, then I'd expect good results. If it's just on paper backed by nothing but good feelings, maybe we're better off burning that paper.

bigfudge• 2 years ago

We don’t tax the shit out of it relative to income earned though. And in the UK we don’t even tax the property in any meaningful way. Do you in the US?

the_real_cher• 2 years ago

I read that you could take all the money from the billionaires in the USA and it would fund the federal government for 8 months.

endo_bunker3• 2 years ago

Not just money, that's liquidating all of their assets at current market prices.

lenerdenator2• 2 years ago

It'd be interesting to see if that would hold true if the country hadn't gone 30+ years without having an adult conversation about taxes.

Republicans learned one lesson in 1993 and learned it well: "Read my lips: no new taxes" should mean no new taxes. Since then government responsibilities have grown as private industry has shirked it in the name of profit transfer to shareholders. There's also of course been wars of convenience.

The gap has been funded with money printing and deficit spending. Now we sit here and say "but all of their money would only fund things for eight months!" and forget why there's so much interest on loans to pay in the first place.

rootusrootus12• 2 years ago

forget why there's so much interest on loans to pay in the first place

Not only that, but we consistently manage to forget who that interest is being paid to. The economy is complex, but we keep treating it like a larger version of a household budget.

bbqfog• 2 years ago

The amazing thing is that a dollar is only worth what all those millions of people agree it is. A few people having infinitely more wealth than everyone else is a very precarious position.

photochemsyn• 2 years ago

The neoliberal program initiated in the 1970s is to blame, and the conditions for that program were set by the gross expenditures of the Vietnam War, whose origins date back to Truman's decision to support French recolonization of Indochina after WWII.

The fundamental goal of neoliberalism is to place all capital in private hands and eliminate any governmental control over capital - and that means eliminating the middle class and creating a two-tiered society of serfs and aristocrats, as existed in 19th century Russia, Britain and Germany.

The methodology is roughly threefold - (1) destroy domestic unions by exporting all well-paid unionized manufacturing jobs in the USA to sweatshop zones in offshore client states, and (2) import as much cheap labor as possible to fill jobs that cannot be exported (construction, services, agribusiness etc), ideally undocumented so that any unionization efforts can be resisted by deporting union leaders and organizers at will. This ensures starvation wages for the serf class. (3) Establish large homeless and prison populations as a constant threat to the serf class - no matter how bad your situation is, it could be worse!

endo_bunker3• 2 years ago

The fundamental goal of neoliberalism is to place all capital in private hands and eliminate any governmental control over capital

Okay

and that means eliminating the middle class and creating a two-tiered society of serfs and aristocrats, as existed in 19th century Russia, Britain and Germany.

No, that simply does not follow.

aguaviva• 2 years ago

A better reading is that neoliberalism is simply indifferent to the welfare of the middle class, and in any case radically opposed to any proactive ("socialist") efforts to protect it. If serfdom and aristocracy are what follow, then so be it.

FactKnower693• 2 years ago

Yeah, it looks bad, but only if you pretend that the ideas these visionaries pioneered were worthless. To take a single example, it might seem obscene that Bezos' net worth would take 32 million years of continuous work for the average Amazon warehouse worker to accrue, but without him who would have come up with the idea of using a computer to buy things on the internet?

JohnMakin3• 2 years ago

You.. think bezos invented ecommerce? It long predates amazon. Amazon wasn't even the first online bookstore!

FactKnower693• 2 years ago

How else would he make two hundred billion dollars? Paying employees coerced into selling their labor a wage which is less than the value their labor creates? Ridiculous

psunavy03• 2 years ago

It's not just being able to come up with the idea, it's being able to build a team and execute without the company going under.

rootusrootus12• 2 years ago

I think Bezos has a halfway decent claim at being a visionary, at least compared to people like Musk, but let's be real -- ecommerce existed way before Amazon. He is a skilled businessman and built a wildly successful monopoly, but I don't see many concepts that he pioneered.

ks20485• 2 years ago

Yeah, but "one click checkout"? Before Amazon, all the greatest minds could come up with was 2 and 3 click checkout.

https://en.wikipedia.org/wiki/1-Click#Patent

twoodfin3• 2 years ago

It occurs to me that if you charted a distribution of political power (pick your metric for that…) it’d look about the same.

A few thousand state and federal officials, rich businessmen with influence, lobbyists, union leaders, …

At the far right you’d have governors of large states, Supreme Court justices, Congressional committee chairs, the President.

Nobody seems to get too worked up over this, it’s the system we’ve chosen. But as a group the folks on the far right of that distribution exercise and have exercised way more critical leverage over the state of my life—during Covid, say—than Larry Ellison and the Walmart heirs.

debit-freak2• 2 years ago

I’d argue that more so than anyone alive having “chosen” this structure, it’s what the structure itself wants to perpetuate. Eg people who go to elite colleges tend to see elite colleges as a reflection of “the system working” or whatever and view other concerns other than perpetuating this as secondary concerns. Same with government jobs, industry, etc etc.

mrtesthah• 2 years ago

Nice, so when do we get to elect the billionaires?

twoodfin3• 2 years ago

You don’t elect a lot of the people with power, either.

My point is we worry a lot about outliers in a wealth distribution but not the outliers in a power distribution (some people, of course, being outliers in both!)

And that seems misguided to me for the reason I mentioned: The unfortunate exercise of political power at least anecdotally seems to be more of a risk to the average person’s health and happiness than the misuse of dollars.

atmavatar2• 2 years ago

I support term limits for billionaires as well.

Retric3• 2 years ago

Singling out COVID is misleading because of the short timeframe. Overall I’ve been more impacted by Jeff Bezos or Bill Gates choices than any single president in my lifetime.

A President has limited power for 4 or 8 years, and that’s it. We don’t put 22 year olds on the Supreme Court or let them act unilaterally. Sure laws stick around but that’s the result of what hundreds of people and other groups of people not changing the rules in a few years.

EasyMark2• 2 years ago

“…than any single president in my lifetime.”

So far! (I would add)

i think the next presidency may be very very different and I give that about 50/50 odds

csomar• 2 years ago

Covid, at least the first few months, is an irregularity. Most of the world was freaked out at that time regardless of the country and its hierarchical society. On the other hand, these business interests lobbied to either open/close to benefit their own bottom lines.

hollerith• 2 years ago

If it were somehow possible to arrange things so that political power was equally distributed (e.g., with nationwide direct democracy deciding all important policy decisions), then life in our country would probably get much much worse.

twoodfin3• 2 years ago

Yup, same as economic power/wealth.

debit-freak2• 2 years ago

How do you figure?

AndrewKemendo• 2 years ago

“Wealth” as a static number is extremely fickle and tells you nothing about reality

The Waltons have a completely different kind of wealth than Musk - In many practical and theoretical ways.

So even within this subset of insane wealth hoarders, there is a difference in kind, type legal structure, ability to liquidate, etc…

We have thousands of examples where someone’s “wealth” disappears overnight because a handful of “analysts” downgrade future expectations of what their percentage of equity is worth in a secondary market. That’s not really going to happen with Buffet, Gates but very possible with Musk and similar.

On the flipside arguably Musk has the most political influence within the right wing (See: recent Trump stuff) compared to for example, the relative influence of the Waltons on the “liberal” wing.

Similarly I could point to a ton of people who aren’t on on this list but fall into the >500M$ category who have a lot more influence on power and economics than some of the people in the top of this list.

The fact that this is not calculated within this framework, means that this ranking is pure vanity and says nothing about economic, power, political power, or anything other than an arbitrary, monetary leaderboard.

cen4• 2 years ago

Pretty sure there is a similar graph for Britain during the wind down phase of their Empire.

readthenotes12• 2 years ago

Wonder what it looks like for China today

mrkandy• 2 years ago

A great example of an article that appeals to emotions (negative ones) by manipulating facts.

testcase_delta• 2 years ago

I'm genuinely curious, and I know this can get political quickly, but I mean this in good faith. The wealth that people like Bezos or Musk have—did it only come into existence because they created their companies? In other words, if they had never been born or chosen a different path, their wealth wouldn't simply be redistributed among others, right? The world would just have less overall wealth, roughly equal to their net worth. Is that correct?

enragedcacti2• 2 years ago

There are a lot of ideological assumptions underlying the very concept of wealth creation, but even if you buy into those I don't think that statement is true. Bezos could only be responsible for creating the difference between him and the hypothetical other most wealth creating possibilities, and there is no reason that difference couldn't be negative.

Jonas Salk, inventor of the Polio vaccine, chose not to patent his creation or seek any profit from it. Imagine the alternative where Jonas Salk patents the Polio vaccine, sells each dose for the profit maximizing price, and becomes one of the wealthiest people in the world. Which scenario led to more overall wealth?

ks20485• 2 years ago

"manipulating facts" implies changing the data. I don't think that phrase applies to simply choosing the way the facts are presented.

AnimalMuppet• 2 years ago

It can. You can tell the truth in a way that is designed to mislead. (See almost every political statement that isn't an out-and-out lie. See much of advertising. See many statements by CEOs. See many statements by government spokespeople and diplomats. And on and on.)

The facts can be true. The narrative isn't necessarily true, and isn't necessarily the best interpretation of the facts.

rootusrootus12• 2 years ago

I look at that graph and think that on the one hand Musk must feel pretty good being on top. On the other hand, though, most of his wealth is tied up in an single incredibly overvalued stock and when the market corrects that interpretation he won't be anywhere even approaching the top. I'd feel much more comfortable being someone like Gates or the Waltons.

plutomeetsyou• 2 years ago

Even with those fluctuations, you can live (more than) comfortably with those $100 billion (probably). Unless you're being sarcastic

rootusrootus12• 2 years ago

Not sarcastic, just looking from a particular perspective. My suspicion is that people with such wild amounts of wealth are way past caring about the material pleasures associated with it and focused on the game. He with the biggest number wins.

In that sense, comfort is about the odds of staying the winner for any length of time, or being unthroned by someone else because you have all your game pieces in one basket.

From the perspective of actual comfort, I assume most of us could be quite comfy with a net worth of a few million. Especially the bottom 90% or so.

dietr1ch• 2 years ago

Mayan economy: Sacrifice your K wealthiest individuals yearly to ensure prosperity of your economy on the years to come. Those sacrificed must give away 90% of their money.

snarkconjecture• 2 years ago

For the individuals shown in the graph, this buys about $6k per American (and after the first year you can't do it again).

EasyMark2• 2 years ago

That doesn’t sound too bad since currently it’s only a $0 payout

amai• 2 years ago

Market monopolies make it possible.

smitty1e• 2 years ago

None of the people summarized in the graph is ever more than one heartbeat from their demise.

All those frog$kins are good as far as they go.

dave333• 2 years ago

The linear scaling is valid to show how strictly L-shaped the curve is but a log scaling would show more detail in the middle and an income histogram would show how much each percentile of the population has in aggregate.

Would also be interesting to compare to other countries maybe Norway one of the most egaliterian and a poor country like Sudan.

grakker• 2 years ago

I have so much trouble understanding the people that come to these types of posts and defend these sociopathic money hoarders. "Uh, you guys don't understand that they can't just liquidate their wealth..." "If they sold all their stock, the stock would crash", and so on. Just amazing.

alexkbog• 2 years ago

Anyone have a proper solution to the issue of wealth re-distribution? This is a fairly novel problem, and I think the government is neither equipped nor competent enough to handle hundreds of billions of dollars in new tax revenue (as some propose) while at the same time, why should we be comfortable with private actors deploying this kind of capital at this scale

Wealth Distribution in the United States

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