I'm surprised someone who picked the name "engineeringwoke" has no love for FDR. He's the GOAT!

The largest bank in the US is #14 on the S&P by market cap. If the Federal Reserve is a conspiracy to make banks profitable, it is doing a poor job. More to the point: I challenge anyone who doesn't like the Fed and the compromise it represents (money printer exists, but is guarded from the politicians by a council of 12) to name their alternative. Hard money? Politicians can print? You picked "hard money." Let's go!

Everyone who learns about the Cantillon Pump thinks they would love to run it in reverse. This is because they don't understand that it does not run in reverse. It is not symmetrical. They underestimate the pain of a deflationary shock, where everyone (namely your employer) gets an incentive to not participate in the economy and then stops participating in the economy (namely by employing you). Rent and debt is still due, of course. This is the pain that inspired the USA to split from Britain (scrip/specie). This is the pain of the Great Depression -- you threw out that 1935 date like it was the culmination of a Bond bad guy plot, not the capitulation of a country tired of deflation. We even have the counterfactual: Germany, having just escaped the Weimar inflation, decided in 1929 to take the deflationary response to the Great Depression. It led them to a very dark place.

Returning to the USA: they weren't called "robber barons" because they failed to accumulate wealth. Capitalism does not guarantee competition (quite the opposite, strong property rights are the nexus of anticompetitive opportunity) which does not remove all profit over the long term, it squeezes it onto assets, which is where that unearned income we were talking about originates from. If you have ever heard or given a business pitch, attended a class in business school, or listened to a VC for 30 seconds you have heard some heinously anticompetitive scheme and their plan to leverage it for personal gain by turning it into an asset they own. Network effects, platform effects, two sided markets, returns to scale, etc etc etc. Usually they don't work, but when they do and you get a stock or a deed or a title to a money fountain (exploitation fountain, seen from the other side) you get to stack trillions while the competition spends decades trying to cross your capitalism-created and capitalism-guaranteed moat.

Yes, in recent times the money printer has been used to exacerbate inequality. But it isn't the cause of inequality -- certainly not if you look at what happened in the 1935: https://ceprdc.tumblr.com/post/87307310830/piketty-in-one-gr...

Turns out you can have an inflationary adjustment and unwind inequality and boost the economy at the same time, so long as you remember to tax the rich. FDR sends his regards!

You'd like Capital in the 21st Century.

According to the IRS, "unearned income" is money received from sources other than employment, such as interest, dividends, rental income, and pensions.

We tax it at a vastly lower rate than ordinary income, and we tax it not at all for the purposes of exponential compounding, which is the application in which it is most problematic. What fraction of Elon's capital gains do you think have ever been realized?

    gains = investment * rate_of_return

Right term: capital allocation decisions are made with skin in the game. Every chunk of the economy has a responsible owner who is rewarded/punished and promoted/demoted for good/bad decisions. Capitalism is a Q-learning algorithm.

Look, I know this is a tech forum and we don't claim to be good at the social sciences, but this is a central debate and r>g, the idea that the rate of return to capital tends to exceed economic growth over the course of history, is a major result from Piketty's Capital In The 21st Century that people interested in "grow the pie" vs "trickle down" really ought to be familiar with. Even if you disagree, you ought to be able to articulate why, and "the average includes winners and losers" ain't it.

"But life has improved, r>g couldn't have been true forever" -- last time the inequality bubble popped because of a great depression and two world wars. The capital was incinerated, metaphorically and literally. It's a cautionary tale and we should aspire to do better.

We've been pushing all the money into the capital economy and all the taxes into the labor economy and this can't go on forever.

The non-explosive way to do this is simply to set the heel above the megacorps today and let inflation push them into it. They will be able to avoid the heel by splitting at their leisure, slowly remediating the consolidation we have seen and restoring competition.

- Ordinary income has sky-high taxes compared to capital gains, and you don't even have to pay the taxes on capital gains if you don't realize them!

- Inelastic labor supply mismanaged into increasingly soggy demand, mathematically tanking wages

- Attributing credit for job creation to capital without attributing blame for job destruction to capital

there are more, but these are all Political Economy decisions that didn't have to be this way. They are this way because people with money and power wanted them to be this way and were willing to morally compromise to get them this way.