James GleickI’m seeing lots of schadenfreude about the guy “losing” $200 billion. It benefits no one. A better way would be to tax the megabillionaires fairly: i.e., returning the bulk of their wealth to the society that made them rich in the first place.
People sometimes forget: After a certain point (let’s say, oh, a hundred milion dollars), the extra wealth is no longer about buying more stuff or living better. It’s about power. Musk buying Twitter is a case in point.
HandgunYoga (he/him/his)@JamesGleick Thorsten Veblen might smile knowing how well his theory has held up, though we can now add ‘conspicuous destruction’ as a special case.
Reminds me of the Roman Emperor who told guests to throw the gold dinner plates into the river. But that guy was smart enough to send divers to secretly retrieve his fortune.
Dave Mandl@JamesGleick I generally agree, but now there seems to be a lot of stuff that you can't buy if you're worth a mere hundred million. Like, a lot of the most prestigious real estate in NYC suddenly seems to be going for $50M or more.
pam_1965For some it's always been about power.
John Markoff@JamesGleick
The Occam’s Razor narrow explanation is that he believed short sellers were using Twitter to manipulate Tesla stock….
The Occam’s Razor narrow explanation is that he believed short sellers were using Twitter to manipulate Tesla stock….
cf@Markoff @JamesGleick there's a bigger simplistic explanation that includes the other investors: they all thought they were buying the de facto hub of crypto & nft, and got stuck holding a steaming bag of crashed hype after they'd signed the papers
@Markoff Heh. That’s a pretty circuitous (i.e. opposite of Occam’s Razor) explanation, John. An indirect and expensive way to protect TSLA, not to mention that it had the opposite result.
The simple explanation, supported by everything he’s said and done, is that he wanted to convert a perceived home for liberal expression into a right-wing noise machine.
@JamesGleick I hae another theory explaining why it is has been such a train wreck, but something I'm willing to post...
JEG@JamesGleick I'm all for taxing the megarich, but I'm not sure 'it benefits no one'. If money is power then Musk losing power in itself benefits society at large. Plus if Musk is losing money because consumers are turning away from Tesla to other electric cars, or turning away from Twitter to other less toxic platforms - Mastodon? - then it may be good thing as well.
Why not have both - the megarich losing money and being taxed?
Why not have both - the megarich losing money and being taxed?
@JoseEdGomes I agree, but I don’t see that he’s lost any power.
@JamesGleick ...yet. I mean, you have a point that he still has way too much power/money. I imagine he lost leverage as CEO of both Tesla and Twitter, but he still holds those positions. I guess the question is what will happen in the near future. If it keeps going downhill for him it means his reckless behaviour has consequences. The schadenfreude probably stems from hope he'll face consequences. Still, we agree the megarich should be taxed way more.
Nebulous Menace (Sandy B.)@JamesGleick @JoseEdGomes He's lost a lot. He had a name that made people go "Let's lend him ten billion and see what happens." He could straight up lie and nobody would call him on it. [examples in next post] He used to be able to call a meeting with the POTUS. He's lost a lot of levers.
@JamesGleick @JoseEdGomes (Lie examples: "If anyone gets hurt on the factory floor, I'll do their job for a day." Swappable Tesla batteries, for tax breaks. $35,000 EVs. Many others.)
Attorney Wonderer@JamesGleick I would add that by not progressively taxing excess wealth, as this country once did, the power that accompanies the wealth is retained by the few rather than being transferred back to the democracy—even though the companies generating the excess wealth are dependent upon the laws, structures, and people of the country to generate the wealth (hello Amazon). It’s democracy supporting capitalism, and capitalism, in turn, devouring democracy. It is not sustainable.
mkb@JamesGleick That’s the thing that always confounds me.
Once you’ve got the best food, best house, best doctors, and all the rest, why even work? Why not make art, be with loved ones, mentor, or watch Love Boat reruns?
Perhaps even asking the question shows why I am not a billionaire.
PJ "Vote Green" CoffeyI think not having megarich parents is why you're not a billionaire. Just choose better parents and you'll be fine.
Darwin Woodka@JamesGleick In a rational society it would become about making other people's lives better.
Rob Wolfe@JamesGleick this is one of those cases where the "money' is vaporized. There is nobody else that is having their wealth increased by that amount.
Am I correct in thinking that?
Am I correct in thinking that?
Dmitry Mazin@robwolfe @JamesGleick twitter’s pre-sale shareholders did well, but James’ original point is very apt
@dmitry @JamesGleick
this has nothing to do with Twitter shares, that was a minor thing.
The 200B is mostly the cratering of #TSLA and my understanding of that is that it is value that vaporized, not that was transferred to someone else.
this has nothing to do with Twitter shares, that was a minor thing.
The 200B is mostly the cratering of #TSLA and my understanding of that is that it is value that vaporized, not that was transferred to someone else.
@robwolfe @JamesGleick ahhh ok. Thank you
Steffen Christensen@robwolfe @dmitry @JamesGleick Understanding what happens to that value is nontrivial.
One take is it wasn't worth that to begin with, as asset value of stock shares aren't "real wealth" until the stock is sold, like the value of housing assets.
Another is that since you can borrow and take out loans against share value, it does have value, indeed at par, and that par value is now extinguished.
@robwolfe @dmitry @JamesGleick
A third is that per the System of National Accounts, stocks have value only when derivative expenditures arise in the real economy, so when you sell them, or use some value to buy equipment, or a stock buy-back happens. Their value is split between the real-world margin fraction taken by brokers (appearing in the System), secondary household and business consumption, and concrete asset purchases as capital creating demand.
A third is that per the System of National Accounts, stocks have value only when derivative expenditures arise in the real economy, so when you sell them, or use some value to buy equipment, or a stock buy-back happens. Their value is split between the real-world margin fraction taken by brokers (appearing in the System), secondary household and business consumption, and concrete asset purchases as capital creating demand.
@robwolfe @dmitry @JamesGleick None of these is entirely satisfying, although I am increasingly partial to the "money only counts when it appears in the real economy" take. That's the self-consistent one that allows ponzi schemes, crypto, and stocks to exist in one unified system without special pleading.
@Wikisteff @dmitry @JamesGleick and since we know that he did exactly that in order to finance the Twitter purchase, that is where it gets "real".
do I have that correct"
do I have that correct"
@robwolfe @dmitry @JamesGleick In the System of National Accounts framework, assets were sold for assets, which were used to buy assets. Nothing changed in the real economy until Musk started laying people off and stopped paying for server space.
However, in an assets-are-moneylike accounting, he sold assets (money) to buy a new asset (Twitter), which he badly mishandled and so his other assets (Tesla stock) collapsed in value (loss of investor confidence).
federico@robwolfe
@JamesGleick
No, that's incorrect. Wealth exists only as goods, land, organizations etc. Money, stocks etc only represent the value of existing wealth. Musk is a little bit less rich making everybody else automatically a tiny bit more rich.
@JamesGleick
No, that's incorrect. Wealth exists only as goods, land, organizations etc. Money, stocks etc only represent the value of existing wealth. Musk is a little bit less rich making everybody else automatically a tiny bit more rich.
@federico3
That makes no sense to me whatsoever, sorry.
That makes no sense to me whatsoever, sorry.
Walter K. Lew@robwolfe @JamesGleick If you want to say it's vaporized, you have to allow for the possibility of it condensing or aggregating again--so far it's just a paper loss, as they say, unless he sold a huge amount of his stock.
GaryO@JamesGleick I agree 100%, but this case points up an interesting wrinkle: can we (or should we) tax _unrealized_ gains or wealth? Corporate valuations are highly variable, unlike traditional forms of wealth.
@oberbrunner Yes, because it’s always the billionaire’s choice whether and when to “realize” the gains.
@JamesGleick For publicly traded companies without any special circumstances, that makes sense.
CJ Stevens - Metaphysiology@JamesGleick Of course that would be better. But, failing that situation, which would require the intervention of just and well-intentioned nation states, schadenfreude it'll have to be.
Wells Beach@JamesGleick. But did he ever really have the money? Was his wealth real or just an idea in peoples minds?
@JamesGleick this makes no economic sense because it 100% kills the incentive for any billionaire to invest and make more money. Not just billionaires but anyone in range of the tax threshold will not want to take a risk to create something that could succeed, thereby usually creating a bunch of benefits to customers, new jobs and so on. They'd be better off spending their money or holding it in a money market. These are the world's most productive people, so depriving them of investment opportunities is counterproductive to the rest of society
Gavin Chait;@JamesGleick the fact that he can lose $200 billion AND *still be a billionaire* is an outrageous failure of tax & social policy.
stiffelman@JamesGleick Like when we at least attempted to operate as if we cared about each other as national policy. Plenty of awful flaws -- deep racism, women with no genuine independent social or economic rights, and so in -- but a progressive tax policy that at least made some sense.
Jörg Seidel@JamesGleick
The wealth never really existed. It was just based on an inflated share price.
@energisch_
The wealth never really existed. It was just based on an inflated share price.
@energisch_
Bathman@lostgen @JamesGleick @energisch_
All of the tech companies (Twitter, Meta, Tesla, etc) have lost their speculative value as interest rates move towards 8%. No more “free money” means that all these boom companies need to start moving towards actual value and profitability. Bloomberg likes to sensationalize and personalize these stories instead of just dealing out the facts. Sells more advertising…
Vesna Manojlović@JamesGleick why not both? schadenfreude & tax the billionaires !
LVN2DRM@JamesGleick I vote for #schadenfreude to be the themesong for 2022.
Bob Wyman@JamesGleick
Andrew Carnegie, once one of America's richest, supported heavy inheritance taxes as a means to return "the people's share" upon one's death. In 1906, he wrote in "The Gospel of Wealth -II" that:
"Where wealth accrues honorably, the people are always silent partners."¹
So, he supported your suggestion for taxes on billionaires with the aim of "returning the bulk of their wealth to the society that made them rich in the first place."
Hammancheez@bobwyman @JamesGleick I mean death bed guilt and fear of the Almighty is one way to get money out of billionaires, but I’d rather we just didn’t have fucking billionaires
@hammancheez @JamesGleick
If markets were competitive and taxes were fair, there would be no billionaires.
If markets were competitive and taxes were fair, there would be no billionaires.
Daniel Freysinger@bobwyman @JamesGleick It amazes me how many people who inherit wealth still believe the United States is a meritocracy.
@bobwyman @JamesGleick there is no honor in massive wealth and that's the first myth we need to get rid of.
Chuck Darwin
Kim Scheinberg@bobwyman @JamesGleick
Forgive me if I'm skeptical of Carnegie supporting heavy inheritance taxes.
Buffett famously does too and declared back in '86 that his kids would receive only “enough money so that they would feel they could do anything, but not so much that they could do nothing.”
Meanwhile, each kid has been gifted $2b+ to each of the foundations the kids run.
That's not exactly supportive of an inheritance tax—quite the opposite. Watch what they do, not what they say.
@kims @JamesGleick
If you haven't read Carnegie's "Gospel of Wealth II" (see link in OP), I suggest that you do. Also, be aware that he set the model that Buffett, Gates, and others follow today. Carnegie was brutal in the way that he ran his business, but few have given away as much money as he did.
If you haven't read Carnegie's "Gospel of Wealth II" (see link in OP), I suggest that you do. Also, be aware that he set the model that Buffett, Gates, and others follow today. Carnegie was brutal in the way that he ran his business, but few have given away as much money as he did.
@bobwyman
I should have been clearer. You wrote:
"Andrew Carnegie, once one of America's richest, supported heavy inheritance taxes as a means to return "the people's share" upon one's death"
An inheritance tax suggests that the government gets the money upon death. Neither Carnegie nor Buffett has or will "returned the people's share" upon death. Their money went to foundations and charities of their choice, not to taxes.
Neil Federspiel 🇨🇦@JamesGleick
I understand and participate enthusiastically in the schadenfreude, but I also agree that we should go further and return a large share of excessive profits to society.
@rdfranke
I understand and participate enthusiastically in the schadenfreude, but I also agree that we should go further and return a large share of excessive profits to society.
@rdfranke
David Gouldin@JamesGleick is that true? This article makes it seem like somebody is benefiting. https://www.bloomberg.com/news/articles/2022-12-29/tesla-s-worst-ever-year-brings-17-billion-windfall-for-shorts
ArchaeoIain@JamesGleick I couldn't agree more, except that nothing "made" them rich. It is about underpaying workers, overcharging buyers, and gambling on certainties
Sasha Fox@JamesGleick Yeah, but until that happens, this probably made him feel really sad. And I like the idea of him feeling sad. It's an essentially imaginary number, but it's one he obviously really cares about, and now it's much smaller.
@JamesGleick The only reason to have some happiness is it does somewhat reduce his power. But remember TSLA’s value was created mostly by lies for which he was never punished and never will be. Whoever believed it was worth more than all the other automakers which each build and sell far more vehicles and $ was always imagining an impossible future.