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That's not a ponzi scheme. A market has arms length buyers and sellers transacting goods. A ponzi scheme uses future investor capital to pay investment returns to previous investors.
Well that speaks to the whole woke/liberal "income or wealth inequality" doesn't it?
When high school or university Social Justice Club students start down the "income inequality" road, it sometimes is useful to make the issue tangible using real people.
Let's take the story of Elisha Graves Otis. Elisha Otis was born in Vermont in 1811, and was a master mechanic, having invented many safety devices and labor saving devices used in bedstead factories in the Northeast US. One such invention was what he named the "Safety Hoist" - it had an ingenious safety device that prevented it from falling if its lifting rope or chain broke. Lives that might be lost were saved.
He went out on his own, setting up shop in Yonkers, NY and sold the world's first Safety Freight Elevator Machine on September 20, 1853. To demonstrate just how safe it was, he installed a Safety Freight Elevator in NYC, famously riding in it up high and ordering a helper to CUT THE LIFT ROPE. He went on to patent independently controlled steam engines to raise and lower the Safety Elevator, and many more improvements as well.
Elisha Otis became a very wealthy man. So in the parlance of Income Inequality, by inventing what we now think of as modern elevators, Elisha Otis ADDED TO income inequality. After all, he was making money hand over fist while the other millions of Americans were plodding along with their lives as usual (most Americans were directly involved in agriculture at that time).
But although the wealth gap between this man, inventor Elisha Otis, and his customers was higher than it was before the invention, the customers got a product they valued that made their lives both better and easier. In economic terms, the wealth of these customers increased slightly while Otis' wealth increased greatly.
Is that increase in wealth inequality a problem? When I’ve asked not particularly bright high school students this question, most all agree it is not a problem. Ditto for Freshman Econ students. Graduate level Econ students are smart enough that they don't need this example to comprehend the issue.
You can substitute any prominent inventor into the anecdote with the same results. You could recount the story of Robert McCulloch who in the 1940s invented a light weight one-man chain-saw. Or you could examine Robert Noyce who invented the Integrated Circuit and co-founded Intel Corporation. Or Steve Wozniak & his partner Steve Jobs. Or Jeff Bezos. And you can substitute in small businesses who similarly add value, and large corporations who do as well - even when their innovation is something as simple-yet-hard as logistics rather than new product creation.
In each case, by virtue of innovation, many inventors (and shareholders of companies) become wealthy - adding to income inequality and its cousin wealth inequality. In each case, customers were better off than they were before the invention.
In each case, despite an increase in "income inequality," everyone is better off. Even those not-particularly-bright high school students get it.
In each case, despite an increase in "income inequality," everyone is better off. Even those not-particularly-bright high school students get it.
But some on C-D do not.
When emotions are used to look at economics, cries of "it's not fairrrrr" are often heard or read.
Often the same people who don't get it believe if person A and/or B and/or C obtain wealth, it means these newly wealthy people took wealth from the not-particularly-bright person or otherwise ruined their chances of obtaining wealth of their own.
They don't understand they too can obtain wealth if they create something of great value, whether that's a product or service or whatever others find useful and want to buy.
I don't think its a stretch to say that if your statement about your home going up $350,000 in value in 6 months is true (and the purchase price of your home was less than $1 billion), that is the sign of a genuinely out of control housing market fueled mostly by the "greater fool theory". Congrats on your remarkable gain.
Or its a brand new neighborhood and now that all the homes are sold you can't build one new anymore forcing you to buy on the secondary market.
Also consider a "gain" is never a gain until the ink is dry on the closing papers.
When emotions are used to look at economics, cries of "it's not fairrrrr" are often heard or read.
Often the same people who don't get it believe if person A and/or B and/or C obtain wealth, it means these newly wealthy people took wealth from the not-particularly-bright person or otherwise ruined their chances of obtaining wealth of their own.
They don't understand they too can obtain wealth if they create something of great value, whether that's a product or service or whatever others find useful and want to buy.
This^^^^^^nails it.
Hey time doesn't stop, I have a cousin that was wealthy, in his 30s and never bought any real estate, simply rented and wouldn't commit. Well he got married, wife put her foot down and they bought a house. So now the b!tcin begins, rates are crazy high, prices are ridiculous.
I stopped him with one sentence:
But remember you wouldn't buy years ago when rates were 2.5% and the real estate cost 75% of what it does now! So clearly the rates/prices were never the issue for you!
Here's a 2018 article written by Warren Buffett. He goes through the thought process of how slow but consistent economic growth has improved people's lives in aggregate, but yet not everyone has benefited from this growth. I've quoted the final couple of sentences of the piece, but the whole thing is worth reading and is not very long. (Just a heads up... the rich family he's referring to is the United States.)
Quote:
The market system, however, has also left many people hopelessly behind, particularly as it has become ever more specialized. These devastating side effects can be ameliorated: a rich family takes care of all its children, not just those with talents valued by the marketplace.
In the years of growth that certainly lie ahead, I have no doubt that America can both deliver riches to many and a decent life to all. We must not settle for less.
Here's a 2018 article written by Warren Buffett. He goes through the thought process of how slow but consistent economic growth has improved people's lives in aggregate, but yet not everyone has benefited from this growth. I've quoted the final couple of sentences of the piece, but the whole thing is worth reading and is not very long. (Just a heads up... the rich family he's referring to is the United States.)
Yeah we have the ability and resources to create a pretty damn nice society, but we choose to allow several gaping holes open and don't really try to make it better.
When high school or university Social Justice Club students start down the "income inequality" road, it sometimes is useful to make the issue tangible using real people.
Let's take the story of Elisha Graves Otis. Elisha Otis was born in Vermont in 1811, and was a master mechanic, having invented many safety devices and labor saving devices used in bedstead factories in the Northeast US. One such invention was what he named the "Safety Hoist" - it had an ingenious safety device that prevented it from falling if its lifting rope or chain broke. Lives that might be lost were saved.
He went out on his own, setting up shop in Yonkers, NY and sold the world's first Safety Freight Elevator Machine on September 20, 1853. To demonstrate just how safe it was, he installed a Safety Freight Elevator in NYC, famously riding in it up high and ordering a helper to CUT THE LIFT ROPE. He went on to patent independently controlled steam engines to raise and lower the Safety Elevator, and many more improvements as well.
Elisha Otis became a very wealthy man. So in the parlance of Income Inequality, by inventing what we now think of as modern elevators, Elisha Otis ADDED TO income inequality. After all, he was making money hand over fist while the other millions of Americans were plodding along with their lives as usual (most Americans were directly involved in agriculture at that time).
But although the wealth gap between this man, inventor Elisha Otis, and his customers was higher than it was before the invention, the customers got a product they valued that made their lives both better and easier. In economic terms, the wealth of these customers increased slightly while Otis' wealth increased greatly.
Is that increase in wealth inequality a problem? When I’ve asked not particularly bright high school students this question, most all agree it is not a problem. Ditto for Freshman Econ students. Graduate level Econ students are smart enough that they don't need this example to comprehend the issue.
You can substitute any prominent inventor into the anecdote with the same results. You could recount the story of Robert McCulloch who in the 1940s invented a light weight one-man chain-saw. Or you could examine Robert Noyce who invented the Integrated Circuit and co-founded Intel Corporation. Or Steve Wozniak & his partner Steve Jobs. Or Jeff Bezos. And you can substitute in small businesses who similarly add value, and large corporations who do as well - even when their innovation is something as simple-yet-hard as logistics rather than new product creation.
In each case, by virtue of innovation, many inventors (and shareholders of companies) become wealthy - adding to income inequality and its cousin wealth inequality. In each case, customers were better off than they were before the invention.
In each case, despite an increase in "income inequality," everyone is better off. Even those not-particularly-bright high school students get it.
But some on C-D do not.
If someone comes up with an idea that makes life easier or safer for everyone or even writes a stupid song, they have the right to make millions upon millions of dollars and they do not owe one single red cent to anyone else. I would not care if that person had to walk over homeless people sleeping in the street, he has no obligation to gibberish one red dent to anyone in need. Of course, if he wants to, that is fine. But no one, and I mean no one, deserves anything from anyone who has something. No redistribution of wealth. Nothing. If you want that, get the hell out and move to your favorite socialist country. Many of these millionaires spent countless hours planning, failing, re-planning and implementing their plans. Many time they take the risk and mortgage their house or borrow money or spend every last cent they have. So, you tell me why anyone who is poor and has nothing deserves any of the money made from the guy who risked it all. Exactly. No one deserves it whether this guy made $1M or $10 Billion. It is nobody’s business. If I had 10 billion dollars that I made by my great ideas, there is only one type of person that I would not give a single nickel to. That would be anyone who asked me for money. They do not deserve it or are entitled to any of it.
That’s it. Plain and simple. Cut an$ dry. And no, I would not ask anyone for any money ever. I have pride and dignity.
If someone comes up with an idea that makes life easier or safer for everyone or even writes a stupid song, they have the right to make millions upon millions of dollars and they do not owe one single red cent to anyone else. I would not care if that person had to walk over homeless people sleeping in the street, he has no obligation to gibberish one red dent to anyone in need. Of course, if he wants to, that is fine. But no one, and I mean no one, deserves anything from anyone who has something. No redistribution of wealth. Nothing. If you want that, get the hell out and move to your favorite socialist country. Many of these millionaires spent countless hours planning, failing, re-planning and implementing their plans. Many time they take the risk and mortgage their house or borrow money or spend every last cent they have. So, you tell me why anyone who is poor and has nothing deserves any of the money made from the guy who risked it all. Exactly. No one deserves it whether this guy made $1M or $10 Billion. It is nobody’s business. If I had 10 billion dollars that I made by my great ideas, there is only one type of person that I would not give a single nickel to. That would be anyone who asked me for money. They do not deserve it or are entitled to any of it.
That’s it. Plain and simple. Cut an$ dry. And no, I would not ask anyone for any money ever. I have pride and dignity.
Orphan children just starve to death.
Mentally or physically handicapped people dying in the street.
Definitely sounds like a paradise.
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