- cross-posted to:
- aboringdystopia@lemmy.world
- cross-posted to:
- aboringdystopia@lemmy.world
Key Points
- The wealth of the top 1% hit a record $44.6 trillion at the end of the fourth quarter.
- All of the gains came from stock holdings thanks to an end-of-year rally.
- Economists say the rising stock market is giving an added boost to consumer spending through what is known as the “wealth effect.”
The wealth of the top 1% hit a record $44.6 trillion at the end of the fourth quarter, as an end-of-year stock rally lifted their portfolios, according to new data from the Federal Reserve.
The total net worth of the top 1%, defined by the Fed as those with wealth over $11 million, increased by $2 trillion in the fourth quarter. All of the gains came from their stock holdings. The value of corporate equities and mutual fund shares held by the top 1% surged to $19.7 trillion from $17.65 trillion the previous quarter.
While their real estate values went up slightly, the value of their privately held businesses declined, essentially canceling out all other gains outside of stocks.
Of all methods for managing food production, capitalist free markets are one of the worst. Farmers must purchase everything to grow the crops, including the seeds and machinery. The machinery for modern farming alone costs $500k when 40 years old, used, and broken. If a large area, say the Midwest, has extremely fertile land capable of growing most crops then farmers will incentivized to purchase the machinery to grow a crop that is profitable in the moment. See the problem yet?
The farmers will then be financially forced into continuing to grow that crop, even if it’s no longer profitable to do so. The government then needs to provide assistance to these farmers: subsidies, research into utilizing thousands of tons of a single crop, exporting most of the crop grown, etc.
Due to the free market, farmers in the Midwest started growing corn because it was profitable during and after WW2. Now the Midwest grows seas of corn and soybeans, because government subsidies mean that growing any other crop is an extremely risky and very expensive. The market needs to hold for multiple years to pay for the seeds and machinery, because everything about farming is expensive. Rather than take the risk, farmers use the machinery they have to purchase the subsidized crops we don’t need because they need money to buy food that was imported rather than grown locally.
There’s a few great leap forwards that suggest otherwise. Government mandating farming (or a lack of farming) also leads to problems.
For better or worse, today’s farming relies upon very expensive equipment to reach the necessary yields. It doesn’t matter what system of government or markets you use, you cannot get around the $Million+ equipment needed for today’s farms.
The only question remaining is how do you fund such equipment? Capitalist markets provide us the shareholder + bondholder as two classes of investors. Bonds require a %yield paid ever year, while shareholders are largely content with (realistic) promises of future profits. If shareholders think one kind of crop is better, they will invest their money into different companies or equipment. If one kind of crop (and equipment for that crop) loses value, then shares will drop, shareholders will stop investing, and the shareholders will move on to better profits.
Just a few years ago, I saw shareholders get together to give Elon Musk $5 Billion to build the Nevada Gigafactory. For better or worse, shareholders here in USA are excellent at raising money. Now the decisions of shareholders (ex: trusting Elon Musk) are suspect. But no one can deny the huge efficacy at raising billions of $$$$ at a time with this methodology. https://www.yahoo.com/finance/news/tesla-tsla-increases-secondary-public-185506659.html?_fsig=mgd.tScfuG49PuaFrUFmzA--~A
Now… shareholders are fucking stupid. That’s the problem. But at least there’s a lot of shareholders, so some shareholders are going to make the right decisions. And some smart shareholders might be smart enough to invest into the correct things (ex: an underrated crop), leading into greater profits.
Sounds like you’re speaking off of ignorance. Farm collectivization has led to some severe famines, but after the collectivization was completed those nations rarely saw food insecurity. China still hasn’t had major food insecurity since being collectivized. I think there are ways to prevent that from happening, because it hasn’t happened in every country that collectivized the farmland.
Stop trying to force things into terms of monetary exchange, because it doesn’t fit for everything. The government can provide the machine, since the US has monetary sovereignty (doesn’t owe a lot of debt to other countries) in a fiat currency. This means that as long as the federal government has access to the labor and resources, it can afford to do so by issuing debt to itself and paying it off with the next year’s run of fiat currency.
Now, it’s impractical and wasteful to manufacture all of the different combine heads for all of the different crops that could be grown by every farmer. Establish a library of sorts where farmers can utilize these machines without cost, and can be repaired without downtime (by using a different one in good repair while the broken one is fixed). Food can then be grown and distributed locally and based on need. This will also reduce overproduction and reduce emissions to transfer food. It also makes every place more resistant to natural disaster and disrupted supply lines.
China imported $104.6 billion in food alone just last year, mostly from the USA.
They’re not the example you think they are. They are increasingly reliant upon imports (and USA’s capitalist system) for food security.
Now there’s plenty of downsides to capitalism. But collecing fucktons of money to fund $Billion ventures is one of the good things that capitalism does exceptionally well. You’re arguing against literally Capitalism’s greatest strength here. Go poke a hole at all the other problems capitalism causes, you aren’t going to make progress on this front.
BTW: China’s increasingly grown capitalist themselves, reliant upon huge bonds and stock markets to raise funds like the USA does. The debate is over, capital markets are widespread even in former Soviet Bloc’s and former Communist countries. And its been like that for decades.
Please read what I said again. The whole thing. I’m saying that the federal government of US doesn’t need to raise any money at all because of modern monetary theory.
It sounds like you just want US Government to nationalize John Deere and take over the production of tool equipment.
If there were no innovation happening (ex: Boeing situation), I think you’d have a point. But my understanding (I’m not a farmer, but just someone looking outside in), it seems like farm equipment innovation continues to skyrocket. IE: As bad and awful as John Deere is, they are doing their primary job of innovation and building new equipment.
I come from a Case family, so I’d rather they nationalized Case IH lol
On a serious note, we don’t need to nationalize the companies that make the machinery to solve this issue. There are many different methods (even in socdem ideologies) to solve this problem created by capitalism. Personally I think farmers should organize amongst themselves to collectively manage farmland and machinery. I don’t think we’d need to nationalize one of those farm equipment companies, we’d just have to abolish intellectual “property”. Then the machinery can be made and improved by anyone, because we don’t need free markets to innovate.
I’m absolutely for right-to-repair laws. I don’t think patents are full evil, but they absolutely need reform. Copyrights should likely be weakened as well.
So I don’t know about “abolishing intellectual property”, but I can meet in the middle: I can agree that patents have become stupid as the patent office no longer can keep up with the pace of inventions and fairly evaluate who is, or isn’t, deserving of patents. Reforming our country to this new reality (ie: that patents are unfairly, and inconsistently applied) is absolutely required.