I don’t know any economists. But, I assume that there are real economists out there that are trying to do science and understand finance and markets, etc. And, I assume that they are constantly in a state of forehead-pounding rage over “popular economics” and the vast amount of bullshit that is spouted in the name of “economics.”
Lately, I’ve been horrified at what political hacks have done with Marx and Hayek. Particularly Hayek, though I admit I am not knowledgeable enough about his work to determine to my own satisfaction whether he was sincere, or a “useful idiot” – no matter how you slice it, though, his “road to serfdom” argument has carried a lot of water for libertarians and establishment laissez-faire capitalists. I have to admit a degree of ignorance about economics because it’s tough slogging and when you start digging into it, you encounter people like Milton Friedman, who will make you want to drive your fist through your computer, to make the smug hypocrisy stop. Anyhow, I tend to dismiss the leading lights of the field as pseudo-scientists, the same way I do early psychologists, and for the same reason: lots of untested theorizing and the ever-present excuse of “market failure” when things don’t work as expected. I admit I’m biased.
So, I was pleasantly surprised to see that there are economists that actually analyze real world results and try to apply measurement to predictions from theories, like scientists are supposed to do. [wapo]
The researchers started by constructing a composite measure of “tax cuts on the rich” encompassing a variety of taxes, including the top tax rate on personal income, the estate tax and the tax on capital gains. Because these taxes are levied predominantly on the wealthiest members of society, the wealthy stand to gain the most when they are cut.
While previous studies on the effects of taxing the rich have tended to focus on just one type of tax, “our measure combines all of these important taxes on the rich into one indicator,” Hope and Limberg said in an email. “This provides a more complete picture of taxes on the rich, but it also allows for comparisons across countries and over time.”
Using this measure, they set out to identify “major” tax cuts on the rich in 18 wealthy nations from 1965 to 2015. In the United States, that included the Reagan-era tax cuts of 1981 and 1986, which dramatically reduced the top income tax rate from 70 percent to 28 percent after fully taking effect.
They then traced what happened to those nations economies in the five years after the cuts were implemented. They focused particularly on income inequality, economic growth as measured by gross domestic product, and the unemployment rate. They aggregated those trends across countries to capture the broadest possible picture of the tax cuts’ effects.
This is the kind of thing I expect from economists: there’s a theory, here are some measurements, and now there are some conclusions. The theory is “trickle down economics” and the measurement is: it makes the rich richer. A few years ago, Thomas Piketty was getting great air-play for his book Capital and Ideology [wc] which argues (I hope I have this right!) that inequality compounds itself once it is present in an economy, i.e.: the rich get richer once they are rich, because that’s what “being rich” means. I don’t think that’s a radical idea, but it seems to have shocked some Americans, while they were voting in a self-professed billionaire con-man who enacted a huge tax-cut for the wealthy and corporations. The reasoning was the same as republicans have always offered: “trust us, a bit of worsening inequality will do you good, because you can get a shit job waxing rich guys’ laborghinis, if they have more lamborghinis.” Or something like that. Meanwhile, they have done whatever they could possibly do to maintain a below-minimum-wage workforce that has no chance of upward mobility, because that allegedly keeps the economy working. Actually, it keeps the inequality working, and – again paraphrasing Piketty perhaps wrongly – inequality is the economy. At a certain point, the wealthy will be able to argue that taxing them will destroy the economy because, see, they can leave to their mansions in Galt’s Gulch, and play golf forever.
Back to the Washington Post article:
First, the tax cuts succeeded at putting more money in the pockets of the rich. The share of national income flowing to the top 1 percent increased by about 0.8 percentage points. (For comparison, in the United States the bottom 10 percent of earners capture only 1.8 percent of the country’s income).
But they had no effect on economic growth or employment. Though those quantities fluctuated slightly after the major tax cuts that were studied, the effect was statistically indistinguishable from zero. The “rocket fuel” so often promised by supporters of these tax cuts? It fizzles out time and time again.
“In the last decade, especially with the pioneering work of Thomas Piketty and his co-authors, there has been a growing consensus that tax cuts for the rich lead to higher income inequality,” Hope and Limberg said. Piketty, a French economist, wrote “Capital in the Twenty-First Century,” a book on the growth of inequality in rich nations.
I guess it’s good that there’s some fact-based analysis backing up Piketty. Now, we will see some public policy changes, for sure.
Crickets.
Given the evidence, why are such targeted tax cuts perennially popular among policymakers, especially Republicans? The authors point to one major reason – the power of wealthy individuals and corporations to set policy agendas through lobbying and campaign contributions.
Wait, are they saying that giving the rich control of the economy means that “the rich get richer” will be the whole of the law? I’m pretty sure nobody saw that coming. Except for Marx, and every labor activist that ever watched US capitalists export low-paying jobs overseas while dodging taxes on their profits, then calling for “bring back American jobs!” which they’d do if only they had another yummy slice of lemon chiffon tax cut.
As another famous philosopher of economics, Dr Pink Floyd said:
Money
Well, get back
I’m all right Jack
Keep your hands off of my stack
Money
It’s a hit
Don’t give me that do goody good bullshit
I’m in the high-fidelity first class traveling set
I think I need a Lear jet
[source: the conversation]
[wid] has some interesting charts that bolster these conclusions:
Wow, look at China and Russia go! It’s as if they’ve become oligarchies controlled by elites in their own economic interest, or something. But South Africa’s the big outlier: it appears that when the white people gave up apartheid, they still kept control of the economy. I bet that they’re not big fans of “tax the rich” there, either.
Next up: radical freethinking economists discover water is wet.
So, I’m convinced that wealth and power (because the two are semi-interchangeable forms of the same thing) are self-perpetuating and will tend to increase by their nature. Is there any history of a place in the world that has reset successfully and re-balanced? On the Piketty chart, it appears that France and England have both collapsed down but both of those countries were massive colonial empires that failed. Is it the failure of imperialism that resulted in economic adjustment? I know that France’s level of inequality under Louis XIV became mind-bendingly huge: something like 75% of all the land in France belonged to the crown, and 15% to the Catholic Church – everyone else got to squabble over the rest and you can see how that worked out. The aristocrats of France did OK, generally, only about 2,000 were actually beheaded by guillotine, but the main impact to them was they were dispossesed of their lands and fortunes. WWI bankrupted England – something about their mad strategy of building a navy that was twice the size of everyone else’s.
Old Russian saying: “the rich can’t eat money.”
Marcus’ version: “the rich can’t eat money, but the poor can eat the rich.”
WIRED UK on Piketty: [wired]
Students in Economics 101 all learn the same joke about how economics is as farcical and made up as creationism. I studied business and heard it:
The concept is really a rather simple one: If you have enough wealth, the income from it will be greater than you can spend.
That’s really it. You can hire people to manage your wealth. You can spend it on houses, boats and space exploration. But whenever a person’s wealth generates more income than they can spend it will snowball into greater and greater wealth. Leading to greater and greater inequality.
For all the various proposals for reducing inequality, there is one which has been shown to work. Look at the US line on the graph above. It just about perfectly correlates to the imposition of a high top marginal tax rate (90% starting in the late 1930s) to the end of a high top marginal tax rate (dropping to 28% starting in the 1980’s).
And it’s not that people with high incomes need to be punished. Or that government revenues are greater because of the high marginal rate. With a high marginal rate, most high-earners deliberately cap their income. Why they work to give the government money? The government gets little extra income from the high-earners.
But the key insight is that the money pouring into a corporation has to go somewhere. If it’s not going to the executive boards, where is it going? It goes to acquisitions, R&D, capital investment, and increased pay and health care to their employees. All of which help continue to grow the economy. The greatest reduction in inequality, and the greatest growth of the American economy coincide with a high top marginal tax rate. I don’t think this is a coincidence.
I understand Piketty became exasperated with economists who spent their time constructing mathematical models and decided instead to adopt an evidence based approach.
His Capital in the 21st Century is a fascinating read.
Is there any history of a place in the world that has reset successfully and re-balanced?
Graeber, D. (2011). Debt: The First 5,000 Years. Melville House Publishing. http://libcom.org/files/__Debt__The_First_5_000_Years.pdf
Hudson, M. (2018). …and Forgive Them Their Debts: Lending, Foreclosure and Redemption from Bronze Age Finance to the Jubilee Year. Islet.
The first part of Graeber covers a lot of Hudson in much less detail but he is a more entertaining writer and deals with things that are outside Hudson’s remit.
Graeber was an anthropologist and does some nice send-ups of orthodox economists.
Hudson is an economist, though not exactly orthodox, and an historian. His treatment of the death of the Gracchi Brothers is most interesting.
Now what does an economist’s threat sense look like? I have not seen many of them think in terms of “negative value towards currency”, and I have seen some people get defensive when I refer to “tokens”, “token collecting”, “token collectors”, and the stock market as “the unstable magic token generator”.
I’ve been thinking about “I’m tired of playing tokens”, and “tokens aren’t people”. And people have liked “how are the token hoarders hoarding more tokens going to help me?” and I realized after the fact the stock market numbers are more abstract than that.
If any of that is useful I don’t care if people take it. I have no idea when I’m blogging again. I’m not bad, there is just a lot to think about.
# 4 mailliw
Piketty became exasperated with economists who spent their time constructing mathematical models and decided instead to adopt an evidence based approach.
Not fair, many economists draw on data. It is just that they are aware that if the data contradicts the theory then they have a data quality issue.
@ 6 Brony, Social Justice Cenobite
Now what does an economist’s threat sense look like?
In general anything that threatens tenure and in more specialized cases their shot at the The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel
I assume that there are real economists out there that are trying to do science and understand finance and markets, etc.
There are. They are usually lumped together under the term hetrodox economists and are on the fringes of the discipline. A bit like a behaviorism in a flock of Jungians in psychology back it the 1930’s.
Wot? I would argue with your list, and also your conclusion. A really big chunk of the money does go to executive pay, so your question of “If it’s not going to the executive boards” seems misleading. And of course it goes to the shareholders as well.
Acquisitions do not “grow the economy”. They reduce competition, which is bad for the economy.
R&D and capital investments are good, but who does that any more? It’s about short term payoff for the shareholders.
Increased pay and health care for the (non-executive) employees? Ha. Why would they do that? Pay is based on competition, not on corporate income.
@7 jkrideau
If reality doesn’t conform to the mathematical model, then obviously reality is at fault.
I wish “shareholder” was a pejorative.
@ 12 Brony, Social Justice Cenobite
I wish “shareholder” was a pejorative.
Well, it’s a bit more obscure but you could use “rentier” which, apparently, is pejorative in many circles.
@10 Reginald Selkirk,
I must have been unclear. In the period when the top marginal rate in the US was 90% (1936 IIRC, to 1972 when it dropped to 70% under Nixon), most of that time it was set at about $400,000/year. During that time executive boards often limited their monetary compensation to $400,000/year. So the money being earned by a company, did not go to executive compensation.
It did go to things like executive offices, company cars, even planes and other perks. But there is a natural limit to even those purchases. The remaining profits went into dividends, R&D, capital investments, worker compensation and health care.
Didn’t you ever wonder why the company owners were so anti-union in the 1920’s but met union demands with only token resistance in the 1950s? People didn’t change, greed didn’t change. What changed is that if the executive board took all the profits, 90% of anything they took above $400,000 was taken by the government. If the executive board gave everyone on the board a $1,000,000 raise, they would only get $100,000. That’s a lot of money, but they hated giving the federal government $900,000. So they didn’t give themselves that level of compensation. But the companies had the money, so they might as well give in to union demands. That’s when company health care for family members really took hold (and which has led to our current problem). It’s also not a coincidence that after Nixon reduced the top marginal rate to 70%, and Reagan dropped it to 36%, a lot more union bashing occurred. It was a lot more subtle in the 1980s and later, but the propaganda designed to make unions unpopular went up a lot after the wealthiest class started keeping more of their income. They could see income going to someone else, which they felt should go to them.
The stock market was not seen as valid way to make a fortune, because capital gains were also counted as income (not 1/2 income as it is today). If the company officers manipulated their stock share price to make it grow, it didn’t really help them. 90% of their profits from the stock market would go away as taxation. So that didn’t happen often. Instead, companies paid dividends. Executives wanted a lot of stock, not to sell, but because it gave them revenue.
If you want to stabilize the stock market, and virtually eliminate the games people play with it today, just tax capital gains at as normal income, but tax dividend income at half the rate. Dividend income only comes from profits, which requires long-term planning and company growth. If the country wants long-term thinking, use the impulse of greed to create incentives for long-term thinking.
We have constructed a society in which there are incentives to think short-term. Where there are incentives to screw over other people. Those incentives are not immutable. We can change them to favor long-term thinking. We can change them so that greed is not unchecked.
By the way, the above two suggestions are two of the three tax code changes I would make to restore the American economy and reduce inequality. In summary these are:
1. Bring back the 90% top marginal tax bracket – This creates a disincentive for greed, puts more money into the economy, strengthens the federal revenues, and reduces inequality.
2. Tax capital gains as normal income and dividends at 1/2 rate – This encourages company investment in stability and growth while reducing hostile takeovers and the practice of buying a company and gutting it.
3. Eliminate all inventory taxes – This eliminates one of the primary reasons to off-shore and generates a more stable supply chain as companies will abandon the just-in-time supply chain. Which will lead to reduced transportation costs and fewer shipments. Which will also lead to a cleaner environment.
It is amazing what impact tax codes can have on our behaviors as a society. And no wonder the wealthy have equated less taxes with more freedom for themselves.
Having read all of the Nero Wolfe series of detective novels by Rex Stout, I have noticed in several books mention of the self-limitation mentioned. Once Wolfe had earned enough to put him in the highest tax bracket, he would refuse to take additional cases because most of the money earned went to the government via taxation.
Well, that’s one thing. But the separate treatment of salary & wages from capital gains leads to more executives getting huge amounts of their earnings in non-salary form; stock options and various perks. How many minimum wage earners have stock options? How many minimum wage earners qualify for inheritance tax? Almost none. Tax breaks on capital gains and inheritance go almost exclusively to the wealthy. Which is why looking exclusively at the marginal rate for the highest brackets, and not at those other forms of income would be a mistake, and I am glad they are not falling into that trap.
Inheritance tax policy stands out for another reason: for high income through salary or capital gains, you could make some argument that the income is deserved through meritocracy (and there are counter-arguments). But for inherited income, there is the exceptional condition that the recipient didn’t earn it. Choosing your parents takes no particular diligence or wisdom.
@jrkrideau 12
True but the point is to scare people now not back then. I’ve seen people complain about general disparagement of the stock market because of retirement concerns. I’m going to think about this one because I can image how “shareholder” will land.
I recently took a course on macro–an intro course, which is easy to find on Coursera. The course went through the trends in macroeconomic thinking in the US in the 20th century, and it was trying to be balanced and speak to the arguments in favor and against. However, when talking about Reagan-era trickle-down economics, aka supply side economics, his characterization was relatively one-sided, saying that it was just a failure. The lecturer, Peter Navarro, I later learned worked in the Trump administration. This gave me a pretty strong impression of Reagan’s economic ideas just being crank-level bad.
@ 15 Reginald Selkirk,
I never said we shouldn’t look at other ways to reduce inequality. However, there is data available today, and not just from he US which says that a high marginal top income tax bracket works.
I mentioned already that capital gains should be taxed as income. But if you want to make the stock market even less attractive to manipulation, just make capital gains income count double. As for dividends, there was once, in the 1950’s, a time when relatively poor people would purchase dividend paying stock as a way to help their retirement. As an example, for almost 40 years TRW paid about $2/share in dividends, and their share price hovered around $25. That doesn’t sound like much, but it wasn’t hard for someone over a lifetime to collect enough shares, maybe 1000 of them, to get a guaranteed $2000/year in income. That’s $166/month, which, if the house was paid for and you didn’t need a car, was enough to live on. Clearly that’s not enough today, but it wasn’t just the executives who owned stock who benefited by owning shares.
As for inheritance tax, I once irritated some libertarians by suggesting that the inheritance tax should be 100%, because the heir didn’t work to earn it. However, there are a couple of reasons I think pushing for it would be a bad idea. First, it would get a lot more resistance. If you push for a high marginal tax bracket the people who are already wealthy will be less concerned about it, only those people who are not yet wealthy but have high income would be really fighting it. And attacking the wealthy directly isn’t really a good idea unless you have lots of people with you (with trumbels). The second reason is that I don’t think it really matters. Wealth only accumulates if the income is greater than the expenditure. By putting a 90% top marginal tax bracket in place, only the people whos expenditures are less than 10% of their income will see an increase in wealth. There may be a few of them, but as the wealth gets split by inheritance over generations even that population will shrink and die off.
Finally, there has been a lot of talk this past year about a ‘wealth’ tax. I really don’t think that’s practicable. Wealth is a relative concept, and depends on the society and appraiser. Who is to say that the Rembrandt in your dining room is worth $500,000 or $1,000,000? If that Rembrandt is moved to Canada before the appraiser comes by, is it valued in US dollars at all? Even attempting to assess things at “fair market value” is a problem. I’ve been to assessing boards of review, where homeowners make claims that their houses are worth less than they paid for them in order to reduce the taxes on them. We’ve had residents show up who purchased a house last year for $800,000 and say the house was only worth $500,000. We ask them why they bought the house for so much if it wasn’t worth it. No, I don’t think trying to implement a wealth tax will do any good. Income is a discrete number, it’s generally easy to calculate and hard to argue with. I’d prefer to stick with an income tax.
Unless you want to talk about modern monetary theory which suggests that taxes may not really be necessary. But that’s a very academic and theoretical discussion about economics which I don’t quite ascribe to yet. It’s an interesting theory, but it was an interesting theory of Friedman’s which caused a lot of pain. So let’s stick with what we know works as policy suggestions for now.
I’m certainly willing to entertain other possible changes to the tax code. But we have evidence that a 90% top marginal tax bracket results in reduced inequality. So let’s start there.
@18 flex: I’m sorry if it appears I am being argumentative. Your #14 addressed several of my points, but I did not see it because I was writing #15 at the same time.
@19 Reginald Selkirk,
No worries.
I’ve long since passed caring about someone appearing argumentative, I care far more that that what I’m saying is clear. It’s probably been close to forty years since I learned that communication is achieved through clarity in presentation, open acceptance of feedback, and additional clarification if necessary. And yes, that revelation occurred even before I first got on USENET. If someone doesn’t understand what I’m trying to communicate that’s my problem, not theirs. Although I confess to regularly abandoning the attempt when it doesn’t appear possible to reach an understanding.
And drinking far more than I should probably helps me stay sane on the internet.
@ 17 Siggy
This gave me a pretty strong impression of Reagan’s economic ideas just being crank-level bad.
Before becoming Ray-gun Ronnie’s running mate, I believe that George H. W. Bush coined the phrase Voodoo Economics.
I should add in relation to my #6 that I realize “tokens” is adjacent ro anti-semetic language. That is a reason I ha e not posted or used it extensively. I’m weighing the potential for splash damage but note that it’s video game compatible. One possibility is being ready for concerns about said splash damage, and any reactions from anti-semites.
The first, most obvious reform anyone could make would be to insist for all wages to be advertised net of all deductions. If someone brings home £1500 every month, it should not matter how much the government get in taxes, just as long as their £18000 per year, or £8.64 per hour if you prefer, is safe.
But telling someone they are earning more than the amount that gets paid into their bank account each month is just a recipe for fomenting resentment of taxes.
@22 Brony, Social Justice Cenobite
I should add in relation to my #6 that I realize “tokens” is adjacent ro anti-semetic language.
What? I am definitely either totally oblivious to popular culture—as a friend tells me–or this is some weird US thing?
Smarties, Maria Theresa thalers, Cowrie Shells, Krugerrands, Cigarettes, they are all tokens.
Trickle down economics is not exactly new.
“There are two ideas of government. There are those who believe that if you just legislate to make the well-to-do prosperous, that their prosperity will leak through on those below. The Democratic idea has been that if you legislate to make the masses prosperous their prosperity will find its way up and through every class that rests upon it.”
— William Jennings Bryan, Cross of Gold speech, 1896
It didn’t work then, it didn’t work under Reagan, it doesn’t work now.
I just stumbled over this. I know you will find it reassuring Marcus
Rise of the Superstar Firms: Taking Oligopoly Seriously in Macroeconomics
As Yves puts it in the intro
The golden rule is often misstated but: “Whoever has the gold makes the rules.”
@jrkrideau 24
Switch “tokens” for “shekels” and it might be more obvious. There is a way of complaining about money that has enough of a similar pattern that I keep it as a hypothetical.
Additionally within a few days of using “how are the token hoarders hoarding more tokens going to help me?” I sarcastically responded to something with “it’s with my Soros money” (I’ll have to check what I was responding to) and someone thought I was serious. Enough people have been called things close to “token hoarders” for me to wonder if I should use a sarcasm tag.
They accepted that I used sarcasm and wondered if their sarcasm filter was broken. I responses that I understansd them checking since it was not personal to me and that I have bumped boundaries before. I can’t say that I got on someone’s radar but that is the sort if thing I think about.
@ Brony
It seems to me that you are overthinking this. Shekels are coins and coins are tokens. So what? Some people hoard money, I expect. But these days when you talk about hoarding money I don’t think about Jews. Who associates hoarding money with Jews? In my day Jews were associated with lending money and with driving hard bargains.
@billyum 29
You feel I am overthinking this. I choose to do this.
The problem is not people who are not thinking about Jews. I am simply being descriptive when I say your concerns are lower on my list, and I don’t see a reason to add them so far.
Also, why haven’t you thought of Jews and anti-semites relative to the kinds of concerns I’ve mentioned? You can care about whatever you want but I’m going to do what I’m going to do.
@billyum
Another way to think about it is, don’t be surprised if more than one group of people get concerned about how you feel about Jews if you start going on about “token collectors”. Just get prepared for it and be useful.
@ Brony
Thanks for the warning, but that doesn’t explain anything. Who are these people and why do they think that collecting tokens in somehow Jewish?
@billyum
Anti-semites use language like “token collectors” with respect to Jewish people in reinforcing stereotypes, old memes. There are lots of variations but looking up examples of anti-semitism as it often appears online can help. I don’t have a resource handy. I’m not sure I can pick a good one today if you need one, it’s more like I encounter it a lot.
@billyum
And keep in mind implicit anti-semitism. Many people will make jokes not realizing it’s not just “fun”, it’s also social dominance behavior. People do act like you are rude but the society is broken.
@ Brony
Thanks again. I’ll do an online search for “token collector”.
Well, I found some games, and then coin collectors, etc. {shrug} Nothing about Jews.
@billyum
Because “tokens” is associated with games more often.
Two words in parentheses have to appear in all hits so “token collector” is more specific. It’s still game weighted however so [“token collector” and jews] might net anti-semites who choose that as a reference, [“token collector” and bigotry] might get discussions about anti-semitism.
Try again with “shekels” and I believe you will see something different. I’ve seen 4chan bigots use “shekels” in anti-semetic behavior and this is one where I can see an anti-semite trying this.
@ Brony
Again, thank you for your response. :)
Meaning no disrespect for you or our discussion, it is adventitious to the original subject of this thread, so I will make this my last post.
My whole question has to do with the substitution of shekel for token. Some tokens are coins and some coins are shekels. Anti-semites might well use the term, shekel, in a derogatory sense. The question for me is whether they do the same for token.
@billyum
I can’t say that they do use it now.
It’s a matter of having seen how supremacists of different kinds transform their dominance signals when the old ones are too overt. Jews have been used by others as scape goats related to money and other things for a while and scapegoating is an instinct. They want to find a way to keep the blame going. It’s like republicans who believe “democrat are socialist” as an insult and don’t separate forms of government from political parties. You could ban the behavior but there will be an urge to get the feelings out another way.
It’s a matter of how bigoted behavior evolves, and having seen it enough to see that this is a potential route. I’m not saying don’t use the words, but if someone suspects anti-semitism let them check you out and acknowledge the issue. That is why I told that other person I did not mind them checking. It’s a social conflict and I don’t like splash damage. And if an antisemite checks to see if the “token hoarders” are Jews be ready for that too.
I’m no economist, but it seems to me that the idea of trickle-down economics is fatally flawed. The rich have deliberately (or deludedly) perpetuated the myth that wealth creates jobs. It doesn’t. Demand creates jobs. Without demand, nobody buys your widgets. If nobody buys your widgets, workers get laid off and/or businesses fail. The way to create demand is by paying workers a decent wage so that they end up with some discretionary income, which they will then spend on widgets or vacations etc. This creates more jobs and tax revenue for the govt. This explanation is a bit simplistic, but essentially true, I think. Any thoughts?
publicola@#40:
The rich have deliberately (or deludedly) perpetuated the myth that wealth creates jobs. It doesn’t. Demand creates jobs.
The rich would say “we create demand!”
The problem is that the rich create jobs for which they will not threaten their wealth. That means that they tend to create low-paid shit jobs, and then a few executive assistant positions. Of course, some rich people would point at Warren Buffett’s secretary, who is a $50 millionaire because she got paid in Berkshire Hathaway stock for a while…
Piketty’s analysis is provoking because he’s basically saying the truth, that rich people don’t create equality because they are literally and metaphorically invested in increasing inequality.