[benreesman]

Who’s standard of living?

We will render arbitrary people homeless to constrain the supply and push up real asset prices for homeowners.

We’ll tolerate flagrant cartel monopoly and flagrant securities fraud and all manner of evil to drive equities up?

Qui bono? Not the working person at the median.

[JumpCrisscross]

> Who’s standard of living?

Each person's. It's an individual determination.

> We will render arbitrary people homeless to constrain the supply and push up real asset prices for homeowners

Yes. Because from the homeowner's perspective, they're maintaining their real standard of living.

Crafting good policy requires being very careful about whose relative standard of living you're sacrificing for the greater good. Because no matter how privileged you think someone is, for them, it's the baseline.

> We’ll tolerate flagrant cartel monopoly and flagrant securities fraud and all manner of evil to drive equities up?

No, not really. Shareholders win in the aftermath of antitrust action and trusted equity markets. We tolerate those things, the first much more than the second, but not for the reasons you presume.

[benreesman]

I’m not sure what the theme of your contention is: it sounds like you’re basically saying everyone will fight as hard as possible with whatever means at their disposal to be maximally selfish.

But that tired toy example from game theory shows that everyone loses if both grass the other up. Countless studies of both human beings and computer programs in the iterated prisoner’s dilemma show that the wining strategy is not in fact to drive housing prices so high that the homeless problem eventually wrecks your property value.

This smash and grab, “how much can you carry” mafia capitalism has been tried before and the result was a guillotine.

[JumpCrisscross]

> everyone will fight as hard as possible with whatever means at their disposal to be maximally selfish

No, I'm saying loss aversion is often misunderstood [1]. Both in its existence and strength. And the fact that it operates in relative terms, i.e. someone who is materially better off than they were 10 years ago may still throw their toys out of the pram if their neighbor is much better.

> the wining strategy is not in fact to drive housing prices so high that the homeless problem eventually wrecks your property value

Sure. The point is you also can't drive home prices down, because that hurts homeowners and activates them as a political bloc. (The solution is real home price growth as close to zero as possible amidst rising real incomes.)

[1] https://en.wikipedia.org/wiki/Loss_aversion

[benreesman]

I’m aware of the concept of loss aversion, but I think it as an explanatory factor for macro economics is a red herring: one of a long list of diversions in the grand company of all trickle-down economics.

People say that the without arbitrary incentives for arbitrary wealth that hard work and innovation won’t happen. Demonstrably false! The Internet that the current cartel is looting was a public private partnership! The best software these days is done substantially by passionate hobbyists!

People point to Silicon Valley and say “this wouldn’t be possible in Europe”. Then they point to the market capitalizations of the vampire megacorps that the world would be far better without as the success story.

People make other arguments slightly craftier: punitive taxes on the mega wealthy wouldn’t raise enough revenue to matter. True, but that’s not the point of a punitive wealth tax: the point of a punitive billionaire tax is to deprive billionaires of godlike power to restructure society in their own interest.

Anyone outside a few narrow bubbles can see that this is going very badly.

I’ll agree with you this far: it’s going to be a tall hill to climb to get people with homes worth 20 times what they paid and 401ks to vote for a sane future. But this is a comparatively recent phenomenon: older people used to be obsessively concerned with the prospects of younger people for trivial biological reasons.

These days? That “blood boy” transfusion thing Thiel is always on about? It’s a terrifying metaphor for the bigger picture. The procedure was pioneered so a father could keep his daughter alive at great risk to himself.

For some reason we now tolerate if not celebrate the vampire ideal of running that backwards.

[JumpCrisscross]

> These days? That “blood boy” transfusion thing Thiel is always on about?

This complaint is old as civilisation. Cato complained about the price of pickled fish exceeding that of ploughmen, and that was hundreds of years before even the Republic peaked.

> punitive taxes on the mega wealthy wouldn’t raise enough revenue to matter

Who said this?

I’m a fan of higher (not necessarily punitive) taxes on billionaires. But you can’t trade that for middle-class income taxes 1:1; the former is far more volatile.

[benreesman]

I’ve read Cato as well as undergraduate behavioral economics.

No tax on the wealthy is worth its weight in paper unless it breaks the back of fluid fungibility of money into policy. We have any number of ways to raise revenue, most of which would be trivial if Bezos cast one ballot like anyone else.

Directly or indirectly bribing legislators or regulators should be a capital offense.

[benreesman]

The nuance around big-cap fraud is in fact wildly complex, sitting at the intersection of tired institutions and role models for young people like the Kardashians and emerging asset classes like BTC and the collapse of the traditional conservative movement and the bitch slapping of a DNC that coronates candidates rather than handing them primary ballots and the fucking Ito calculus of second degree non-stationary in the presence of a different underlying distribution every minute and exhaustingly many other factors.

But we went through the Enron thing, at a high level?

Because the public tolerates it. We have a financial sector where routine financing is run through permutations and combinations and evasions that in the default capital raise the legitimate entities would be far better served by some version of what YC does with e.g. the SAFE docs. When you apply string theory people to bond pricing you get one of two things: socially negative complexity / garish externalities and whatever the hell Medallion is doing.

Pushing that sector up into the double digits is weird: those people should be playing chess against Magnus Carlson not John Q Taxpayer. You can in fact convert genius into a gangrenous infection. And before you say that cheating is inevitable, inb4 predictable soundbyte, no it isn’t. The only two utilities of arbitrary wealth past mundane security and as much luxury as anyone can count (which is nowhere near billions) are blind “I Am The Repubkic” sociopathy and actual security in a world where the real ballers don’t feel safe on the same continent as their subjects. There are places where this is pushed even further: the City generally, let’s call it Canary Wharf is a wonder drug for international FX and outright fraud with thugs and just kind of a lesion on the Old Smoke.

Plus? Cheating is impossible or even difficult to detect or enforce or discourage to make an example of pour encorages les autres? Ask Madoff’s estate how it went to try that shit with the money of the donor dinner circuit. I recommend not fucking around and finding out on Jamie Dimon’s nest egg. You’ll wish you were never born.

Now if after all that unpleasant real talk about some but maybe not all the things you condescended via “reasons you presume” are actually a matter of the integrity of our companies and regulators and financial markets?

Then tell me you are already going through appropriate channels to bring the guilty to justice or can the TED talk and count your pieces of eight.

You seem like a really smart person with at least some basic moral instinct so I’m going to give you the benefit of the doubt and just ask you to not try to teach your grandfather how to suck eggs.