25 Hedge Fund Managers Are Worth 680,000 Teachers

[Rajiv]

Re: 25 Hedge Fund Managers Are Worth 680,000 Teachers

Of course it benefits the rich -- but not because of asset price valuation, but rather from rentier income -- in particular, rent on money, in other words interest, and in particular, compound interest. It is the power to print money, and the power to preferentially give it to privileged parties that leads to the increasing income gap.

Kennedy proposes an alternative, and so does Ellen Brown in "the Web of Debt"

[marvenger]

Re: 25 Hedge Fund Managers - how about Going after CDFIs

Greed is the problem. Markets aren't effecient. Sociopaths will exploit market imperfections for their own gains, no guilt to keep them in check. Sociopaths get more rich and powerful, markets get more ineffient, sociopaths get richer. answer: Restrict wealth inequalities, no one is worth hundreds of millions or even billions of dollars. Simple.

[radon]

Re: 25 Hedge Fund Managers Are Worth 680,000 Teachers

There is always a limit to how much one can obscure - there is only so much cash one can store under the mattress.

Lowering the tax rates did not lead to less obscuring. It appears to have only increased it, and increased the access to tax havens.

Tax havens were not at all easily accesible in those years. Capital Flows across nations were much much more tightly regulated.

You might be surprised at the difference money laundering and anti terror laws have made in the game of hiding assets.

[radon]

Re: 25 Hedge Fund Managers Are Worth 680,000 Teachers

Of course it benefits the rich -- but not because of asset price valuation, but rather from rentier income -- in particular, rent on money, in other words interest, and in particular, compound interest. It is the power to print money, and the power to preferentially give it to privileged parties that leads to the increasing income gap.

Kennedy proposes an alternative, and so does Ellen Brown in "the Web of Debt"

Would people want those same assets if they did not produce income? When there is a difference between asset value and earnings it presents an opportunity for arbitrage. But you are right in that people who have access to capital at the beginning of an inflationary cycle benefit from it disproportionately. This is one of the mechanisms by which wealth becomes concentrated. It should be particularly instructive on why inflation is so insidious. Nothing here about taxes though. Anyway we are getting closer.

[ThePythonicCow]

Re: 25 Hedge Fund Managers Are Worth 680,000 Teachers

Not a problem. Will do. Since I always look at things in either a hybrid or threaded mode, it did not strike me that people are unaware of the threading.

Yes, that is an imperfection in the user interface of this web forum software.

Those of us who have too much time on our hands and rescan all threads for the latest post ( New Posts ) tend to use the "Linear" Display Mode, so that posts are in strict time order, with anything yet unread is below the current screen. This results in this minor disconnect between the two reading styles that we see here.

If each forum post was displayed with an active link to its parent, then this would not be a problem.

Thanks!

[Rajiv]

Re: 25 Hedge Fund Managers Are Worth 680,000 Teachers

Nothing here about taxes though. Anyway we are getting closer.

Taxes become important as a method of money destruction. This will happen when Governments run surpluses. and retire the debt. Reduced debt means reduced money supply -- this springs logically from the fact that all money is debt.

For surpluses to happen, there has to be an increase of revenue in comparison to spending. This can occur on either side of the balance sheet.

There are other ways to reduce money supply - The solution proposed by Kennedy actually originated with Silvio Gesell

Ellen Brown models her solutions around the original model adopted by the colony of Pennsylvania, however, she probably would accept Kennedy's notions quite readily.

And yes we are getting closer -- we are both looking at the same problem with a slightly different perspective -- that is all.

[chr5648]

Re: 25 Hedge Fund Managers Are Worth 680,000 Teachers

Of course it benefits the rich -- but not because of asset price valuation, but rather from rentier income -- in particular, rent on money, in other words interest, and in particular, compound interest. It is the power to print money, and the power to preferentially give it to privileged parties that leads to the increasing income gap.

Kennedy proposes an alternative, and so does Ellen Brown in "the Web of Debt"

I have read and completely understand and agree with the problem of debt and usury. But knowing that doesn't change a dam thing. You couldn't possibly educate enough people on this, and most would not understand. Add to that, both modern political parties need the debt and usury system, they would not be able to exist without it. Nothing is going to change.

The only thing most can get from this discussion, is to become the usurer and owner of the debt to become rich. The problems of society and economy is so deep, usury/debt is only the tip of the iceberg. Trying to use arguments like teacher vs. hedge funds, akin to apple vs. orange plays perfectly into the game of propaganda and class warfare which will continue to keep people dumbed down from the reality of debt/usury.

In the mean time knowing that the system is NOT going to change, why not complain against high taxes?

[chr5648]

Re: 25 Hedge Fund Managers Are Worth 680,000 Teachers

Taxes become important as a method of money destruction. This will happen when Governments run surpluses. and retire the debt. Reduced debt means reduced money supply -- this springs logically from the fact that all money is debt.

For surpluses to happen, there has to be an increase of revenue in comparison to spending. This can occur on either side of the balance sheet.

Agreed the problem is that any extra revenue the government gets, it does either one to two things or both.

1) waste it on some stupid war
2) waste it on some stupid social program

I would beware of making the assumption that .gov has the interests of the people and country in mind in regards to retiring debt.

[Rajiv]

Re: 25 Hedge Fund Managers Are Worth 680,000 Teachers

Trying to use arguments like teacher vs. hedge funds, akin to apple vs. orange plays perfectly into the game of propaganda and class warfare which will continue to keep people dumbed down from the reality of debt/usury.

Not necessarily! I have not mentioned the third and the fourth way to money destruction. Historically, the 3rd and the 4th methods have been the most used. Hudson espouses the 3rd way, and others now becoming increasingly vocal, espouse the 4th way.

In my mind both of the above options are destructive. The first one, is peaceful, and has been used in times past -- that of a "debt jubilee" -- but this is destructive at a societal level, and discourages savings -- it is sort of like the "ant" giving in to the "grasshopper" in order to maintain social harmony.

The 4th way, the most common way in history, of course, is what I am afraid we are headed for -- the path of the Four Horsemen.

[chr5648]

Re: 25 Hedge Fund Managers Are Worth 680,000 Teachers

Not necessarily! I have not mentioned the third and the fourth way to money destruction. Historically, the 3rd and the 4th methods have been the most used. Hudson espouses the 3rd way, and others now becoming increasingly vocal, espouse the 4th way.

In my mind both of the above options are destructive. The first one, is peaceful, and has been used in times past -- that of a "debt jubilee" -- but this is destructive at a societal level, and discourages savings -- it is sort of like the "ant" giving in to the "grasshopper" in order to maintain social harmony.

The 4th way, the most common way in history, of course, is what I am afraid we are headed for -- the path of the Four Horsemen.

can you give a link to the 3rd and 4th ways of money destruction?

[Rajiv]

Re: 25 Hedge Fund Managers Are Worth 680,000 Teachers

can you give a link to the 3rd and 4th ways of money destruction?

I think I already did

1) Government running budget surplus and retiring Debt

2) Currency that loses value with age -- e.g. the stamp scrip proposed by Silvio Gisell -- use it or lose it. (in other words "Money as a hot potato")



3) Debt Jubilee - Hudson - The Lost Tradition of Biblical Debt Cancellations

4) Warfare between groups and nations -- revolutions within nations, warfare between nations -- forceful reclamation of debt!

[chr5648]

Re: 25 Hedge Fund Managers Are Worth 680,000 Teachers

A system by design to give the function the .gov wants.

I remember in the movie 12 monkeys, Brad Pitt's character, a man in a mental health hospital makes a rant and says that in society you are mentally ill if you save, you are considered crazy if you don't spend. This quote/rant hits it on the spot, along with the 4 points, the .gov doesn't want you to have money or save, only spend and spend and spend. Usury/debt is key to this system, and in my opinion only the tip of the ice berg. Thats the type of economics proposed to the peasantry. A different type is given to the rich.

[bpr]

Re: 25 Hedge Fund Managers Are Worth 680,000 Teachers

In 2007 Warren Buffet said he paid 17.7% when the top marginal rate was 35%. Did he not make enough money to get into the top tax bracket?

You do have a basic understanding of how tax brackets work, and different tax levels for different types of income, right?

I'm not arguing that the top marginal rate was not 91% or that people did not pay taxes in the 1954. I will say that none of the "rich" paid 91% of what they earned. They don't today and they didn't then.

Nobody ever said the rich paid 91% of what they earned. That's the top marginal rate, not the net tax on income.

http://en.wikipedia.org/wiki/Tax_rate#Marginal

I'm not sure if you're just ideologically blinded or if you really have no idea how our tax system works.

[bpr]

Re: 25 Hedge Fund Managers Are Worth 680,000 Teachers

I think part of the problem in this debate, partly why it went off track so early, is that we don't have an adequate definition of "hedge fund":

1. What do hedge managers do?

They run funds into which very rich people put money to make even more money. Hedge fund managers move the money around in very risky ways to get the most enormous yields possible. (Wealthy investors believe they are entitled to double digit and even triple digit returns.)

Because hedge funds are considered playthings for the rich, who presumably are fully aware of all the risks, they are exempt from most financial regulations. (We’ll soon see if the financial reform bill now moving through the Senate changes this in any substantial way.)

The wealthy will have placed an estimated $2 trillion into hedge funds by the end of this year. (That’s about $6,500 for every man, woman and child in the U.S.)

This is not a definition, it's an impression: rich people put money into a lot of things, and a lot of things "are considered playthings."

A hedge fund is an investment fund that is differently regulated than mutual funds. That's my definition, make up your own.

Some will argue that a hedge fund has to have some sort of long-short "hedging" aspect to it, but that isn't really true. Some things we call "hedge funds" do not hedge anything at all: I think it was Fairfield Sentry that was 100% Madoff funds. How's that for hedging?

So, it really is a legal or regulatory distinction, more than anything else.

You can't say hedge funds are "good" or "bad," because there are all different types of funds. Some will act just like a mutual fund. Some more traditional hedge funds will have a market neutral or long-short aspect. Some will just put all of your money with some guy named Bernie and skim off the top.

One may say that the lack of regulation, which is the defining aspect of a hedge fund, is what allowed certain funds to expose weaknesses in the market and thereby return it to some sort of equilibrium without cataclysm.

I'll buy that, but I'll also argue that the lack of regulation creates more systemic risk than it exposes (or rectifies) thereby multiplying the effects of a Madoff-type event.

[radon]

Re: 25 Hedge Fund Managers Are Worth 680,000 Teachers

Taxes become important as a method of money destruction.

Right, this is why our income tax was added as a necessary part of the fractional reserve system, but annual tax revenues as a percentage of the GDP have remained relatively constant since WWII, somewhere around 19.5%, no mater what the top marginal rate. Just as expanding debt drives the GDP higher, the resulting inflation erodes the wealth of the middle class by destroying the purchasing power of their savings, and enhancing the wealth of the rich by increasing the value of their assets. I'm of the opinion that this silent tax has done far more to cause the income gap than a change in the top tax bracket.