| > A bit simplified, but think of the money as coming from the profits from the companies that have been successful. To be honest, most of the money is coming from pension funds, endowments, and state bodies (i.e. large institutions with monstrous piles of money). They allocate most of that money to post-IPO stocks and bonds, but they'll hand over a small fraction to 'alternative investments' too. Post-financial crisis, when interest rates came tumbling down, two things happened. First, bondholders (i.e. large institutions) made a lot of money. Second, bonds became less attractive as an investment, making alternatives like early stage tech look good in comparison. It's partly accurate to say that the hot money pouring into silicon valley comes from previous companies' successes. But a lot of the money is coming from 'me too' institutional investors who are chasing previous investment performance. > The companies create jobs which create huge amounts of income taxes... It's possible to create jobs wastefully. I could pay ten people to dig a trench while I pay ten other people to fill it in. Your arguments would seemingly still stand, but not much of value would get built. |