[Danihan]

I agree with much of what you said, yet I just don't see it as all that bad of a situation.

I still think there is a lot of upward mobility even in that scenario -- the smarter people I know earn good salaries and have nice lifestyles. Nicer than their parents, in most cases, mainly because consumer technology constantly gets better and cheaper.

And there is still opportunity for risk takers to start their own companies, and it's really not all that hard with some traction to get acquired by a bigger player.

Of course, people with a lot of capital get rewarded for holding onto it / being conservative with it, but that's just common sense, not throwing good money after bad.

It's like we're all supposed to say, "Yeah! Late stage capitalism is so awful!" and nod along, but it doesn't feel awful to me at all. I have a 2016 Mazda that cost $18k and it's just awesome for the price. I bought a brand new iPhone SE for $150. I bought a 50 inch TV on black Friday for $200.

My parents as kids didn't have running water in their houses.

I'm not all about materialism, but I'm really at a loss for what exactly I'm supposed to be feeling outraged about. I don't even really make that high of a salary, just average middle class.

[freyir]

> I still think there is a lot of upward mobility even in that scenario -- the smarter people I know earn good salaries and have nice lifestyles. Nicer than their parents, in most cases, mainly because consumer technology constantly gets better and cheaper.

A lot of smart, hard-working, college-educated people I know live in studio apartments or with roommates in their 30s, because otherwise they can't make ends meet. Many work in STEM jobs, but not at one of the high-profile web/advertising companies that are currently printing cash. Their parents at the same age owned homes, often while working in blue collar jobs with one parent staying home to raise the kids.

Regardless of whether we, as individuals, can afford an iPhone or a TV, upwards mobility on a whole is declining. Income inequality is increasing. And the political system is under the thumb of lobbyists and billionaires who frequently act out of pure self interest. The United States government has spent $250 million a day for the past 16 years on wars that most people don't want but are powerless to stop. These are trends that are upsetting to many people, despite the momentary gratification provided by of our iPhones and TVs.

[knolan]

My parents had paid off their mortgage when they were my age. My father was self employed and my mother a housewife. I’m on a reasonably good salary but banks won’t loan us enough to buy an averaged sized family home even though we have a reasonable deposit. My partner would have to be on an equally sized salary but her teaching job pays very little.

Sure we have some nicer gadgets and personal comforts but the cost of accommodation and property has skyrocketed way out of proportion.

[jknoepfler]

I suspect a lot of these comparisons are not apples to apples.

Declining wages are real, but populations are declining in the affordable but undesirable towns where property is cheap that my parents and grandparents bought into.

My mother's parents bought their first home in Minot, North Dakota and saved up for a tiny home in St. Paul, Minnesota. He was an engineer who put himself through school while living in a boxcar in Montana in the depression. She was a housewife. They scraped and saved, and did well for themselves despite hard circumstances (the depression, world war II, etc.)

My parents bought a starter home in Bloomington, MN. He was an attorney, she stayed at home. They moved to a wealthier suburb to find better schools when they could afford to.

Both sets saved aggressively, didn't go out, didn't drink, maintained cars themselves, didn't take elaborate vac actions, and lived in relatively low cost areas.

Me? I live in a booming tech hub. Prices aren't even comparable. I spend on food and wine and travel. I have a fancy phone I don't need and take my car to a mechanic for standard maintenance. I "can't afford a home" because I don't want to repeat the decisions of my elders. I could certainly buy a home in Minot with cash, and could get a mortgage in Bloomington without too much effort, but I don't prefer those options to what I'm doing now.

That's speaking for me only, but I'm pretty skeptical that prudent living doesn't have similar or better payouts than it did fifty years ago.

[justicezyx]

The problem is not that the growth is not there. But the sharing the growth corresponding to people's contribution.

Do the super rich really should enjoy the wealth? Are those really justified? Do their employees has done proportionally smaller amount of contribution to only entitle to that much less wealth in salary?

[charlesdm]

Wealth != salary. Most wealthy people who got wealthy didn't get there by making a large salary, they (at some point) booked capital gains on something.

Nothing is stopping you from venturing out into the world and setting up a business, and making your way into the 1%.

Most work is commodity work. And in a lot of cases, you have a significant amount of people who can solve a problem. This results in a race to the bottom in terms of compensation.

[Can_Not]

> Nothing is stopping you from venturing out into the world and setting up a business, and making your way into the 1%.

Nothing except the 1%-ers who are pulling up every ladder behind them they can.

[justicezyx]

> Nothing is stopping you from venturing out into the world and setting up a business, and making your way into the 1%.

Well, that's the issue we were discussing: Is there a system that can move the society in a rate that is at least as good as what we have now, but at the same time does not result into the 0.1% problem.

[andrewjl]

The problem isn't necessarily capitalism, but market failure in housing. Economic laws dictate that anyone who wants to purchase a house should be able find one that they can afford (assuming good credit history, etc), instead through zoning and other measures regions like the Bay Area and others choose not to build.

[traek]

> Economic laws dictate that anyone who wants to purchase a house should be able find one that they can afford

Which economic laws dictate that?

[andrewjl]

Supply and demand

[traek]

You misunderstand supply and demand. Consumers can be (and are) priced out of the housing market just as they can be priced out of any market.

[Can_Not]

The other user probably did understand supply and demand. Consumers being priced out of the housing market can be a market failure. And in this scenario, it is a market failure. For every homeless person living in the street, there are 6 empty homes in the US, but a couple with 2 jobs and a down payment can't get approved for a home loan? Most definitely there is a market failure.

https://en.m.wikipedia.org/wiki/Market_failure

[andrewjl]

As long as there's land to build on and materials to build with, all creditworthy consumers who wish to buy a house should be able to buy one. (I'm using should in a non-normative sense here.) It may not be spacious, it may not be in the best school district, heck it may be a condo and not a standalone house, but it'll be at a price they can afford.

[losteric]

> the smarter people I know earn good salaries and have nice lifestyles. Nicer than their parents, in most cases, mainly because consumer technology constantly gets better and cheaper.

This is because today's booming companies rely on brain power instead of manpower. What does the future hold for people that aren't smart or born into money? As we continue externalizing intelligence to machines, eventually smart people will start falling victim to the automation trend that killed "dumb" jobs.

As I see it, we really need to increase funding for higher education (including adult retraining) and revamp K-12 to make the most of intelligent people from all socioeconomic backgrounds, while also placing greater emphasis on trade programs and small businesses.

We'd also benefit from tariffs on imported Chinese goods, increasing domestic manufacturing (rather than waiting until free trade equalizes global quality of life).

> I'm really at a loss for what exactly I'm supposed to be feeling outraged about.

Personally, I'm deeply concerned but not outraged... I vote for sound policies and politicians that may avoid the next Great Depression, but I profit when the public votes for more unregulated capitalism.

[Danihan]

Underrated post, completely agree. There have been several times when I wasn't doing so well financially and I wondered -- if I'm this smart (not to be cocky, but top 1% at least) and struggling, how are other people making it at all?

The answer is, they take far fewer risks than I do and rarely mess up. And when they do mess up it's years of hard work to recover.

But yeah, there is definitely some social Darwinism currently at play in regards to intelligence.

[ouid]

out of control wealth inequality precedes economic collapse.

Pollution is the clear example, I think. The more money I have, the more money I can make by polluting. If I capture below a certain threshold of the benefits of pollution, then the personal cost to me of pollution outweighs any benefit I might receive, and I'm disincentivized from polluting. The more wealth inequality there is, the more frequently scenarios in which pollution is profitable to me occur. Compounding this problem, pollution increases wealth inequality on its own. It creates health burdens and lowers output. It's expensive for society. So I end up profiting while everyone else takes a loss, thereby increasing wealth inequality.

Democratic government helps a great deal with this problem (although simple majority is insufficient to offset it entirely, even with ideal information), but democratic governments themselves become polluted by exactly the same decision making processes.

[kbenson]

The question is, how much of the status quo your describe is because we're not in a self contained system, and actually outsource a lot of the problems to developing countries? If the system you describe was constrained to just the United States, and no goods or capital could enter or leave, would we expect a similar system? Because scaled up, that's the world in X decades. Unless we decide, and rely on, various insurrections, rebellions and regime changes to change the system in some countries such that there's always a third world economy to take advantage of. Even if that's the reality of the future (which I think is morally repugnant to rely on), there's no guarantee that cheap external labor won't be extremely constrained in the future, even if it's not entirely gone. (Unless we specifically cause it to be so through political maneuvering and war, but I like to think that's crackpot territory...).

[CodeMage]

> Unless we decide, and rely on, various insurrections, rebellions and regime changes to change the system in some countries such that there's always a third world economy to take advantage of.

> (Unless we specifically cause it to be so through political maneuvering and war, but I like to think that's crackpot territory...).

When you look at the history of the world and consider current geopolitical situation, what leads you to believe that's crackpot territory?

[kbenson]

I'm not sure. I'm hoping it's not some combination of wishful thinking and denial. :/

[dbingham]

We're already in this situation and the data do not entirely agree with your anecdotes. Social mobility is quantifiably dropping. And that's a problem.

[1] https://www.theatlantic.com/business/archive/2016/07/social-...

[jrjf940]

Honestly if you don't know what to feel outraged about you need do some research of your own. There's far to much that needs to be explained to you and a forum isn't the ideal place for an economics lecture. In the future if you're this out of your element just refrain from commenting on economic issues.