I wrote, below, that I thought that a lot of Elon's activity needs to be taxed. Then something else occurred:
Some of these companies, the government needs to just nationalize. Get too big. We're just going to buy up your company and cut you a check for fair market value. And you we'll take taxes of your profit at the capital gains rate.
Then, the government can sell the stock back to the market. Basically the opposite of what they did with GM after the 2008 crash.
"On the other hand, I find it hard to believe that a trillionaire will ever be regulated. His chip stack is too big. He’s too powerful."
Don't fully agree here. Ultimately, Musk - or any hyper-rich person - relies upon the grace of the state, a truth that Trump has been very helpful in illuminating for future corrective administrations, should they have the political will.
I can see lawyers in a Democratic Justice Department making a MUCH better-faith argument in Court to justify the nationalizing of Facebook, Tesla or Space-X than anything this administration has brought to its various power grabs.
One surprising outcome from the AI bubble, put into hyperdrive by Tesla/SpaceX/X's yuuge ponzi scheme IPO, is I'm finally reconsidering the wisdom of Jack Bogle. When you can game the system, and force suckers like me to buy into a raving lunatic like Elon Musk, the whole wisdom of low fees index funds falls apart.
For some time, I've been diversifying away from US full market index funds. They've made money, but I don't trust the market. So I've used gains to buy international stocks and mid caps. All of these have been index funds, too. So the flawed logic is imbedded in these side bets too.
I'm gonna write Vanguard, and Fidelity, and ask how they'll handle the SpaceX IPO. And I'm going to think seriously (but not too long) about transitioning into -eep!- actively managed funds.
As for fixes? The oligarchs won't let mere politicians fix the system, until there is a huge crisis. That seems a ways off, but who knows? Regulating private equity/credit would be a start. Re-instating quarterly earnings reporting requirements makes sense. Building rules into index funds to prevent gaming the system would also be great.
Perhaps a financial institution will do some of this, to gain the non-casino/honest market segment. There would be takers, though I haven't seen that happen in the financial system we have now. Did anyone outside of Steve Eisman cry wolf in 2008? Not that I know of!
What I think will happen is the vacuum used by wealth to suck up any remaining wealth among the 90% (and probably the 99%) will just get strong, reducing the vast majority of use to serfdom (or whatever its modern moniker will be)---Mississippi's "Totally Not A Debtors' Prison" program is a working model.
What I hope will happen is we'll rise up and kill everyone worth more than what, 20 billion?
Sooner or later democrats, us, have to figure out how to best eat the ultra rich, prepare a recipe book, and convince enough hungry people to dine out.
So glad I was raised to believe in the system. I'd be disappointed if I couldn't have my world view shattered on yet another fundamental principle of the wealth gap.
Eat the rich. They are best served with hot gold filigree in their veins.
I was recently on a cruise (Holland America's Westerdam, if anyone is curious) to Alaska, and I wandered into the casino. I had done just a smattering of research and I knew Texas Hold 'Em against the house offered the best odds, although of course all odds are dreadful. Some of the players had very large stacks of chips, although that was irrelevant because the game I was playing wasn't against them: we were all playing against the dealer's two down facing cards. Our bets were to move forward with our own pair, so there was very little thinking involved.
Had I been playing against others, though, if there had been a player with unimaginably high stacks of the largest-value chips, I would have packed up and found another table. DON'T PLAY THAT GAME. If my investments are in broad mutual funds, it's time to cash out and buy something else. It might be time to buy Rocket Lab, or Norwegian Cruise Lines, or Amazon. Single stocks would be preferable to the large basket stocks, particularly if the baskets will be re-weighted to include an overpriced ATM for this racist.
It's a terrible day to be economically literate, but as far as I can tell, they've all been terrible days to be economically literate. When I was a very weird teenager, Art Buchwald used to have a column, often accompanied by cartoons of voodoo economics. So I've been hearing "supply side trickle down is a scam that doesn't work" from the economically literate since 1980. It didn't matter, did it? All literacy gets you is a feeling of doom.
Cause my neighbors know there's a way to get my stuff without working for it. If Musk can do it - and he does - they can do it too. Trump is gonna take everything from illegals and give it to the righteous, so trickle down away, we're next when the illegals don't end up to be as profitable as Jewish people were in 1940 Germany. These people want their stuff, by gum. Reagan said he could do it by going after Black welfare queens and taking their stuff, but Black people didn't have enough stuff. So we escalate. Until the Musk fans of the world have enough stuff. Which they never will.
The rise of passive has been accelerated by federal law designating Qualified Default Investment Alternatives such that only passive and target date (made up of passive) funds qualify: an HR department which defaults 401(k) participants into anything else opens themselves up to legal risk if the funds have a bad year.
I have no solutions, mainly because large-scale economics baffles me. I got a low "C" in high school econ. This Triad made what Elon is doing with SpaceX more understandable.
I'm just keeping our finances barely above water and hoping my target fund doesn't go poof.
I wrote, below, that I thought that a lot of Elon's activity needs to be taxed. Then something else occurred:
Some of these companies, the government needs to just nationalize. Get too big. We're just going to buy up your company and cut you a check for fair market value. And you we'll take taxes of your profit at the capital gains rate.
Then, the government can sell the stock back to the market. Basically the opposite of what they did with GM after the 2008 crash.
Thank you. I’m about ready to liquidate my retirement account and hide it under my bed. This is after all that I’ve read
Once again, it's not Late Stage Capitalism, it's Corruption, and Bernie is not a Socialist even though he may say so.
The government has failed at its job to regulate markets properly.
We don't have Capitalism and haven't for some time for various reasons.
The last valid efforts were IBM's consent degree and the break up of AT&T, at last that I can remember off the top of my head.
Musk's stack is not too big; it's been done before, just don't elect Jared Polis (the Tina Peters thing) or anyone like him to anything ever again.
That's all I got for today and still a good duck...
“I believe that banking institutions are more dangerous to our liberties than standing armies." -Thomas Jefferson
"On the other hand, I find it hard to believe that a trillionaire will ever be regulated. His chip stack is too big. He’s too powerful."
Don't fully agree here. Ultimately, Musk - or any hyper-rich person - relies upon the grace of the state, a truth that Trump has been very helpful in illuminating for future corrective administrations, should they have the political will.
I can see lawyers in a Democratic Justice Department making a MUCH better-faith argument in Court to justify the nationalizing of Facebook, Tesla or Space-X than anything this administration has brought to its various power grabs.
Can someone offer a solution for this doom doom and just doom scenario?
I love today’s newsletter so much, being a nerd professional and all.
One surprising outcome from the AI bubble, put into hyperdrive by Tesla/SpaceX/X's yuuge ponzi scheme IPO, is I'm finally reconsidering the wisdom of Jack Bogle. When you can game the system, and force suckers like me to buy into a raving lunatic like Elon Musk, the whole wisdom of low fees index funds falls apart.
For some time, I've been diversifying away from US full market index funds. They've made money, but I don't trust the market. So I've used gains to buy international stocks and mid caps. All of these have been index funds, too. So the flawed logic is imbedded in these side bets too.
I'm gonna write Vanguard, and Fidelity, and ask how they'll handle the SpaceX IPO. And I'm going to think seriously (but not too long) about transitioning into -eep!- actively managed funds.
As for fixes? The oligarchs won't let mere politicians fix the system, until there is a huge crisis. That seems a ways off, but who knows? Regulating private equity/credit would be a start. Re-instating quarterly earnings reporting requirements makes sense. Building rules into index funds to prevent gaming the system would also be great.
Perhaps a financial institution will do some of this, to gain the non-casino/honest market segment. There would be takers, though I haven't seen that happen in the financial system we have now. Did anyone outside of Steve Eisman cry wolf in 2008? Not that I know of!
What I think will happen is the vacuum used by wealth to suck up any remaining wealth among the 90% (and probably the 99%) will just get strong, reducing the vast majority of use to serfdom (or whatever its modern moniker will be)---Mississippi's "Totally Not A Debtors' Prison" program is a working model.
What I hope will happen is we'll rise up and kill everyone worth more than what, 20 billion?
Sooner or later democrats, us, have to figure out how to best eat the ultra rich, prepare a recipe book, and convince enough hungry people to dine out.
So glad I was raised to believe in the system. I'd be disappointed if I couldn't have my world view shattered on yet another fundamental principle of the wealth gap.
Eat the rich. They are best served with hot gold filigree in their veins.
I was recently on a cruise (Holland America's Westerdam, if anyone is curious) to Alaska, and I wandered into the casino. I had done just a smattering of research and I knew Texas Hold 'Em against the house offered the best odds, although of course all odds are dreadful. Some of the players had very large stacks of chips, although that was irrelevant because the game I was playing wasn't against them: we were all playing against the dealer's two down facing cards. Our bets were to move forward with our own pair, so there was very little thinking involved.
Had I been playing against others, though, if there had been a player with unimaginably high stacks of the largest-value chips, I would have packed up and found another table. DON'T PLAY THAT GAME. If my investments are in broad mutual funds, it's time to cash out and buy something else. It might be time to buy Rocket Lab, or Norwegian Cruise Lines, or Amazon. Single stocks would be preferable to the large basket stocks, particularly if the baskets will be re-weighted to include an overpriced ATM for this racist.
It's a terrible day to be economically literate, but as far as I can tell, they've all been terrible days to be economically literate. When I was a very weird teenager, Art Buchwald used to have a column, often accompanied by cartoons of voodoo economics. So I've been hearing "supply side trickle down is a scam that doesn't work" from the economically literate since 1980. It didn't matter, did it? All literacy gets you is a feeling of doom.
Cause my neighbors know there's a way to get my stuff without working for it. If Musk can do it - and he does - they can do it too. Trump is gonna take everything from illegals and give it to the righteous, so trickle down away, we're next when the illegals don't end up to be as profitable as Jewish people were in 1940 Germany. These people want their stuff, by gum. Reagan said he could do it by going after Black welfare queens and taking their stuff, but Black people didn't have enough stuff. So we escalate. Until the Musk fans of the world have enough stuff. Which they never will.
The rise of passive has been accelerated by federal law designating Qualified Default Investment Alternatives such that only passive and target date (made up of passive) funds qualify: an HR department which defaults 401(k) participants into anything else opens themselves up to legal risk if the funds have a bad year.
I have no solutions, mainly because large-scale economics baffles me. I got a low "C" in high school econ. This Triad made what Elon is doing with SpaceX more understandable.
I'm just keeping our finances barely above water and hoping my target fund doesn't go poof.
Nationalize. National security requires it. Pennies on the dollar, and they'd all still be rich.