Even Billionaires Love This Guy’s Book About Inequality

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Even Billionaires Love This Guy’s Book About Inequality
BY MARK GIMEIN | APRIL 24, 2014 2:13 AM EDT |
POSTED IN ECONOMICS
| 33 COMMENTS

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Photographer: Bruno Levy/Challenges-REA via Redux

Thomas Piketty

Among the fans of French economist Thomas Piketty, count one you may not have expected, who seems to have been reading his book, “Capital in the 21st Century” with keen interest:



Carl Icahn announcing that he’s reading Piketty’s book probably works to the advantage of both: Icahn shows he’s intellectually engaged, Piketty gets to know he’s reaching the corridors of power. That Icahn should actually bother to read the book, though, has incited disbelief:



Really, though, it’s less of a surprise than you might think at first blush. Icahn (net worth $22.7 billion; rank among world’s billionaires: 32) acquired his wealth starting from modest circumstances. He grew up in the outskirts of Queens, the same borough of New York City where The Market Now grew up, and TMN can attest it contains hardly anyone who is truly rich.

A self-made billionaire being somewhat in tune with Piketty’s book is not shocking. More perplexing is why in an era of massive self-made fortunes like Icahn’s, Piketty chooses to talk largely about the dangers of dynastic fortunes built up through inheritance.

No question, the income gap between rich and poor has skyrocketed in the U.S. and Europe. But the driver of that in the United States has not been inheritance. On the contrary, the general trend over the last decades has been for more of the wealth at the top to be earned through wages and entrepreneurship. The main source for that information is work by theUC Berkeley economist Emmanuel Saez together with … yes, Thomas Piketty.

This is true just about any way you look at it. The share of income for the top 0.5% of Americans coming from capital gains was just 13.4 percent. Even for the very top of the pyramid (the 0.01%) the share was 41.3 percent, much less than the share of top incomes that came from capital gains in the 1960s and 1970s.

Meanwhile, dividends — once the main source of income for those at the very top — diminished. Until 1980, the top 0.01% got more of their income from dividends than than from wages (for much of that period, four times as much).

So why does Piketty spend much of his book concentrating on inherited wealth? He may simply be prescient. Taking a long view of history, a return to those days of rentier’s living off bond coupons — maybe somewhat harder than Piketty asserts — could be around the corner. Still it’s worth pointing out that the problem of inequality that comes from inherited wealth is less thorny than the problem of wealth that is acquired through effort — or even luck. Piketty writes:

“The significance of inequalities of wealth differs depending on whether those inequalities derive from inherited wealth or savings. … Inequality is not necessarily bad in itself: the key question is to decide whether it is justified, whether there are reasons for it.”

The buildup of inherited wealth is the easiest kind of inequality on which to get a consensus. There’s nothing especially admirable about being born with a trust fund. Billionaires and socialists agree about expanding opportunity. Much harder is figuring out what to do when even relatively fair opportunities still yield brutally unequal results.

Plenty of the well-off will wring their hands over the dangers of dynastic fortune. Good luck reaching the same kind of consensus about the earnings of a chief executive, the programming team at a successful startup, the creators of a TV show — or a billionaire mogul who worked his way up from Queens.

Even Billionaires Love This Guy's Book About Inequality - The Market Now
 

Suicide King

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:childplease: @ inheritance.

The GDP last year was $16.8 trillion.

$11.2 trillion went to 5% of the population.

These are smoke and mirrors. Men lie. Women lie. Numbers don't.

The Congressional Budget Office did their own independent study, and it concluded only thing that can decrease income inequality, is higher incomes. Not higher taxes or pulling yourself up by your bootstraps.

Using billionaires as a point of reference is idiotic, and this should only stay in the confines of Tea Party conventions. This has no place in an open discussion.

The rich gonna have to break bread at some point or leave the planet. They dont have the defenses to save themselves from a rabid public. Wealthy families have been torn apart by populations they were fukking over, time and time again. It doesnt matter how powerful they were.

Basically. But this generation has been very slow to react.

We need the support that the white middle class (the 80%) have for the 1% to shift into violent resistance.
 

tmonster

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lip service only imo
Krug breaks it down on why the rich don't want you to read this book
and Icahn may be poor compared to the people Krugman is tambout


already got my copy
 

Suicide King

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lip service only imo
Krug breaks it down on why the rich don't want you to read this book
and Icahn may be poor compared to the people Krugman is tambout


already got my copy




Income inequality determines how much wealth rich people can keep.

They have all the money because they are not paying anyone. So of course the heirs of Walmart going to have a ton of money, because all the money stayed with them and pennies went to the workers. Fix income inequality and you fix wealth inequality at the same damn time.

:camby: @ treating wealth inequality like its a separate issue.
 

philmonroe

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Income inequality determines how much wealth rich people can keep.

They have all the money because they are not paying anyone. So of course the heirs of Walmart going to have a ton of money, because all the money stayed with them and pennies went to the workers. Fix income inequality and you fix wealth inequality at the same damn time.

:camby: @ treating wealth inequality like its a separate issue.
Why should someone that started their own business and made their own money have to give back to those that aren't doing well? I'm lost on that and if you were in the same position how much are you realistically giving back or are you going to be one of these dudes that just has a house and a Camry and give the rest away? I just find it hard to tell anybody who started their own stuff they have to give money back to the general public. I do believe people should pay taxes outside of that it is what it is.
 

Suicide King

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Why should someone that started their own business and made their own money have to give back to those that aren't doing well? I'm lost on that and if you were in the same position how much are you realistically giving back or are you going to be one of these dudes that just has a house and a Camry and give the rest away? I just find it hard to tell anybody who started their own stuff they have to give money back to the general public. I do believe people should pay taxes outside of that it is what it is.

What does this have to do with Walmart or any corporation paying a fair wage like they did in the 50's, 60's, 70's, and 80's?

And yes, a fair wage can be calculated.
 
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