The Death of the Middle-Class Musician

> You can either transfer more wealth to the poorer people without taxing the rich (lets say by helicopter money), [...]

Helicopter money transfers real wealth from the people who previously held cash.

It creates nominal wealth, but not real wealth.

> It should also make intuitive sense - if the rich (lets say top 5%) hold 95% of wealth it means there is less for everyone else - less wealth that is because the resources like land, apartments and good education are finite and not abundant.

Let's invert that: if I make everyone's lives 10% more miserable, but the lives of the richest 1% a whopping 20% more miserable, that will have decreased inequality. But it's not a good idea.

That's basically just the idea from https://news.ycombinator.com/item?id=44411538 inverted. Many people have a hard time seeing that wealth can increase, but it's pretty easy to see that total wealth can decrease: I can set fire to my piano, and no one else gets any better because of it.

> Let's invert that: if I make everyone's lives 10% more miserable, but the lives of the richest 1% a whopping 20% more miserable, that will have decreased inequality. But it's not a good idea.

You are conflating two different things, wealth and misery.

Wealth is about material resources not misery or happiness. This is about giving more people access to more material resources by taking away some of the exclusive access to those resource by the rich. Will preventing the uber rich families from buying their seventeenth fleet of housing complexes and their twentieth estate make them "more miserable" sure, probably, but it also secures the independence of the people you make that house available to (rather than make them permanent wage slaves to the landed class that just scoops up homes that they don't materially need need to extract rents etc).

How does taking some ones second mansion away to help feed struggling family decrease happiness? If there is a net decrease, the rich person needs to examine their priorities.

> This is about giving more people access to more material resources by taking away some of the exclusive access to those resource by the rich.

You realize most of this wealth is tied up in stocks and other assets that anyone can purchase, right?

> Will preventing the uber rich families from buying their seventeenth fleet of housing complexes

But ARE the likes of Bezos and Musk actually buying housing complexes in the first place, nevermind ones that anyone who isn’t already rich are able to afford?

> and their twentieth estate

And who but the extremely rich would be able to buy these estates in the first place?

Certain forms of stock are effectively liquid. This means that you can turn around and leverage them to buy material resources quite easily.

It doesn't matter that "anyone can purchase them". If you have N dollars and I have Nx1000I can buy more stock than you. I can also diversify better than you, I simply have more options, more power, etc. Unless I am a total idiot or you get absurdly lucky and effectively win the lotto, my greater amount of initial capital will go further than your small amount.

> But ARE the likes of Bezos and Musk actually buying housing complexes in the first place, nevermind ones that anyone who isn’t already rich are able to afford?

I didn't mention either of these people. There are plenty of people not in the limelight that do precisely the things I'm talking about, often through banks and companies that they run—I can have my investment firm buy property and increase my salary off the extracted rents and it achieves the same thing.

> And who but the extremely rich would be able to buy these estates in the first place?

Exactly. You just restated the problem with inequality. It gives a small class of people exclusive access to important material resources. Further they can they use this exclusivity to further entrench their positions.

> But ARE the likes of Bezos and Musk actually buying housing complexes in the first place, nevermind ones that anyone who isn’t already rich are able to afford?...

One of the bigger ways this plays out as opposed to your example is: Tons of property is locked up as short term vacation rentals that are only used a tiny percent of the time and only by the rich. There's a spectrum of how rich but we know the bottom 50% almost never use them for example

Similarly the amount of resources locked up in industries that 99% of the time only cater to the very rich is quite a lot and more importantly the trajectory is going more and more that direction.

You could have a world where the work is done mostly by robots and a few million rich people use the world as their playground and then what happens to everyone else?

See https://en.wikipedia.org/wiki/Deadweight_loss

> Similarly the amount of resources locked up in industries that 99% of the time only cater to the very rich is quite a lot and more importantly the trajectory is going more and more that direction.

Sources?

In any case, what you say seems to suggest that consumption taxes would be the way to go.

> Tons of property is locked up as short term vacation rentals

You might not want to dig too closely into who exactly owns all these short term vacation rentals. There's a non-trivial number of people who aren't conventionally what we picture as being "wealthy" who own a lot of them. It was a very popular Covid-era life hack to buy a house at an absurdly low interest rate and rent it out. And that's not getting into people who just managed to buy a house at the right time. For example, I'm just a software engineer in a MCOL area but I bought my first house in the early 2000s and paid it off a little under 20 years later. I sold to fund the next house, but I could've easily bought something more modest and rented the old one out. This is not an uncommon occurrence.

> that are only used a tiny percent of the time and only by the rich. There's a spectrum of how rich but we know the bottom 50% almost never use them for example

Are you under the impression that you have to be fabulously wealthy to rent an AirBNB for the weekend?

> If you have N dollars and I have Nx1000I can buy more stock than you. I can also diversify better than you, I simply have more options, more power, etc. Unless I am a total idiot or you get absurdly lucky and effectively win the lotto, my greater amount of initial capital will go further than your small amount.

And, so what? This just sounds like whining that people in this world who have more money than you exist. I'm sure there's a lot of people in this world who would hold this exactly same argument against you ("you have N dollars, but I have N/1000"). You're not denied the opportunity to build wealth with what money you DO have just because Bezos and Musk et al exist.

> Certain forms of stock are effectively liquid. This means that you can turn around and leverage them to buy material resources quite easily.

Sure, but this isn't the infinite money glitch people seem to think it is. The loan and its interest have to get repaid with... money! That's first taxed! And anything purchased is... subject to taxation!

> It gives a small class of people exclusive access to important material resources.

Look, no matter how little income inequality is, you're gonna have to be rich to say, buy a building in Manhattan or a house in some similarly coveted area.

I broadly agree with everything you say.

> Sure, but this isn't the infinite money glitch people seem to think it is. The loan and its interest have to get repaid with... money! That's first taxed! And anything purchased is... subject to taxation!

Interestingly, my broker lets me just pile up the interest and doesn't expect me to pay anything back, but only as long as my overall portfolio is worth comfortably more than my debt.

Of course, if I ever want to actually get at all my money, I'll need to pay the debt off.

Btw, leveraging your stock portfolio isn't all that different from a mortgage on your house. But people seem to be much more confused about the effects of the former than the latter. It seems to be easier for people to understand that a mortgage ain't an infinite money machine.

> Tons of property is locked up as short term vacation rentals that are only used a tiny percent of the time and only by the rich.

Im guessing you don’t know how much property this is. It’s probably under 5% and so has very little effect on the market.

I'm guessing neither knows. So 5% is just another WAG.

Here in my college town, the new townhouses in prestigious locations are dominated by football-game-day occupation by the rich. So there's that.

> And, so what? This just sounds like whining that people in this world who have more money than you exist. I'm sure there's a lot of people in this world who would hold this exactly same argument against you ("you have N dollars, but I have N/1000"). You're not denied the opportunity to build wealth with what money you DO have just because Bezos and Musk et al exist.

I don't have a problem with differences in wealth. My problem is with (a) differences so extreme that they border on the inhumane (we arguably have enough resources amassed to end world hunger, yet people still starve. Why?) (b) People are fed the lie that this system is purely meritocratic. That is plainly untrue. That was my point about the relative "distance" your money can go. If you are born into a wealthy family, you can basically live a zero-labor life and continue to reap rewards, generate more income, gather more resources for yourself, concentrate capital. When your origin is the greatest determining factor in wealth, it's a gross lie to suggest to day laborers that if they just "work hard" they too can strike it rich.

Sure, I would agree that under the current system manhattan remains unaffordable. But this is not an essential property of manhattan, as you seem to think. It is a side effect of the current economic structure we have. Alternative structures would lead to significantly more affordable living in the city. In fact the NYC dems just voted for a mayoral candidate who wants to establish such an alternative. People who think like you are increasingly becoming the minority, and it's because it's glaringly and exceedingly obvious that there are massive problems of wealth distribution in the current system. You can honestly identify that there are issues and ask for solutions without being anti capitalist.

People get so caught up in morality when it comes to wealth, which is absurd. As if somehow wanting some of Bezos money to be redistributed so that it can feed people instead of paying for 500mil dollar yatchs is a moral affront. How about we instead focus on the moral affront of underpaying workers, having them the piss in bottles in warehouses, gaming the system by incorporating offshore, the list is endless. It's hilarious that anyone would defend the rights of these robber barons. You've got to be either seriously brainwashed or an extreme ideologue to think that there are no issues with inequality today. Even staunch capitalists are starting to admit there are problems. Its simple systems dynamics. Any system that maximizes singular variables is necessarily unstable and heading toward collapse.