[twoquestions]

This guy put into much better words what I've been thinking for a while.

It doesn't matter to me at all that Bill Gates has more money than God, because he's empathetic to people who aren't as rich and aren't as great as he is, and wants to continue to use his strength to lift people up instead of feathering his own nest even more.

It's when people get the idea that "I'm better, so I deserve better than Them!" that really raises my eyebrows. I have no problem with people having more money than me, it's when they make a new world for themselves (like the movie in the article) and cut themselves off from the world they served in order to get rich is when Really Bad Things Happen.

[VLM]

"because he's empathetic to people"

Given how easily manipulated people are, and us being people, you may be a little over optimistic in your evaluation of reality.

Adding another level of indirection nobody cares whats accomplished, just whats signaled.

So you're cool because he's got good PR that signals well, but assuming the world will be OK because he actually is doing stuff. That might not turn out so well.

Note I'm not interesting in arguing about Bill in particular, but as a general problem across the entire culture, because, after all, thats how inequality is measured.

[spikels]

Can you give some examples of the "Really Bad Things" you are thinking of?

[jgroszko]

Not even as sinister as sibling comment here talking about genocides, these billionaires are wielding disproportionate political power to encourage policies that effect lower classes negatively to the benefit of their own bottom line.

On a foreign scale, defense contractors have a vested interest in keeping the Middle East unstable and have the political power to push congress towards putting more US forces there. Domestically, it's hard to find a more plausible explanation for so many state governors doing things like opting out of ACA, limiting unions, closing schools, or enabling the Flint water crisis.

[RickHull]

> so many state governors doing things like ... enabling the Flint water crisis.

Beware of simplistic narratives. It now looks like Flint took on the very tough job of water treatment as a jobs / stimulus program[1] -- something they turned out to be completely incompetent at -- and also as a way to resolve a pricing spat with Detroit over water supply.

As well the Michigan DEQ shoulders a lot of the blame for covering up the issues.

1. http://reason.com/blog/2016/01/25/the-flint-water-crisis-is-...

[jgroszko]

Ahhh good point, I haven't actually been following that story very closely.

[sharemywin]

use lobbyists. throw lots of soft money at politics. hold bazillions off shore so they can avoid as many taxes as possible. become patent trolls. buy back their own stock so they make themselves rich while screwing ordinary investors and employees and companies. pay less in taxes than their secretaries. Colluding into oligopolies and monopolies so that can extract monopoly profits. stop spending in a recession then complaining because the government does. not training employees and cutting benefits.

[tomp]

> buy back their own stock so they make themselves rich while screwing ordinary investors and employees and companies

I'm not sure how this is valid reasoning... Aren't stocks "bought-back" on the public market? If so, then buybacks would push up the stock price, which would benefit arbitrary investors directly (those who were willing to sell at a slightly higher price) and all investors indirectly.

[mattzito]

I'm not 100% sure this is what the GP was referring to, but a common (and totally legal!) technique to prop up a flat or trending downward company is to start a share buyback program. You take cash that you have no idea what to do with anyway, and rather than return it to investors through a dividend, you start buying back shares. That props up your EPS, since there are fewer shares on the market, and you continue to make your numbers.

In addition, this helps to keep your share price high/growing, which benefits insiders who then sell the stock, knowing that the fundamentals of the business are shaky.

The best part is that all of this is done in the open, it's just that typical retail investors are not necessarily sophisticated enough to understand what's happening, and accept the company's argument that they're buying back their stock because it's "undervalued"

[yummyfajitas]

This is the same as dividends, except that the shareholders pay lower taxes.

Suppose you own 100 shares shares worth $100. If they issue $10 worth of dividends, then you receive $10 and the stock price goes down to $0.90, so your 100 shares are worth $90. If they do a share buyback, you get $10 and your remaining 90 shares are worth $90.

The main difference is that in the first case you pay dividend tax on $10, in the second case you only pay capital gains tax on 10x($1 - cost basis), plus the cap gains rate is lower than the dividend rate.

[WalterBright]

I hear again the notion that investors are too stupid to know what is going on. The institutional investors, the ones who manage funds, are the ones that move markets, and they know damm well what is going on, and the shares get priced accordingly.

[mattzito]

So - I do advisory work sometimes for institutional investors. They ask me to consult on technology companies and talk about their market prospects and what X means in a company's earnings report. Those folks, while definitely savvier than the retail investor I described, are often so far off from the realities of the business we are discussing that it's shocking. There are exceptions of course, but by and large the market makers are equally victim to the representation of the company management

[erbo]

The downside of that strategy, of course, is that if you incur losses after the buyback, those losses, on a per-share basis, are magnified to the same degree as your earnings were. The sword cuts both ways.

[mattzito]

Yes, but since you are the insiders and have a long-term vision of subsequent quarters, you often know (or suspect) what will happen and adjust accordingly.

[soneca]

not gp, but I think of rwandan genocide where this idea of power/wealth superiority lead to Really Bad Things.

Maybe French Revolution or Soviet Revolution of 1917? Here I mean that things before the revolutions were really bad and the revolutions were bad in themselves (as bloody).

[twoquestions]

In addition to what soneca said, it could also motivate a government to enact bad populist policy (confiscatory tax rates, punitive wealth confiscation) and leave us all poorer.

Or the elites could convince the government to execute bad policy to protect themselves at the expense of society (like our awful patent system).

[ZeroGravitas]

Trump elected President.

[lintiness]

they wear bathrobes and gucci slippers around for one!

[twelvechairs]

Its not the 'gap' or the 'upper end' which is important in itself though. Its the lower end - whether someone here has a reasonable life and ability to reach their potential. One way of raising this lower end is to redistribute from the rich which takes away very little of their potential for the above

[vixen99]

It's a way but a lousy one. How can any system which depends on a flow of wealth from the efforts of A to support B, work in the long term? Ultimately people have to stand on their own feet.

The benefit system in Britain demonstrates this very well. About 20 million families receive some kind of benefit (64% of all families), about 8.7 million of them pensioners. For nearly 10 million families, benefits make up more than half of their income (30% of all families), around 5.3 million of them pensioners. Isn't it much the same in the US? Is this really the way forward? It’s certainly got impetus because Peter will always vote for Paul to pay more in tax when it benefits Peter. A drastic rethink of the whole way we organize ourselves is needed. We need to get smart and focus on how to stem the natural condition for most people - which is poverty - as history tells us. Only in the last few years has this trend been reversed to a great degree. Global capitalism is lifting people out of poverty at the fastest rate in human history because people are increasingly being enabled to dig their own way out of misery.