... those who have lots of wealth typically don't have it primarily in dollars. They have stocks and bonds. Stocks typically go up with inflation. Bonds don't benefit from inflation-- quite the opposite-- but investors typically demand higher yields if inflation is expected, so there is a risk of inflation priced in.
I have heard that money managers, depending upon what is going on, shifts the balance of where money is invested: either stocks or bonds even while keeping some money in both at all times. This may explain some of thier motivations. Thanks.
Inflation makes debts easier to manage, as incomes and wages that increase faster than the principal make them easy to pay off. Creditors can also decline to provide loans if they expect inflation will make lending not worthwhile for them-- or potentially demand a higher interest rate.
Got a bro that bought as house in the early 80s. I think he was paying 18%. Paid only $40K but was still told, "see you at your foreclosure". I think they'll lend the money but it is going to cost you! (My last mortgage was under 5%. As low as 3% now. I could see that just driving up house prices. But houses will get bigger. And cost more. and cost more to heat and maintain!)
The thing about all this is that wages don't necessarily increase with other prices. They certainly can. But they don't have to.
So I guess the point is: the effects of inflation are various and depend on a number of other factors which make inflation alone not terribly relevant to income inequality.
What I would like to see is every business restructured to give its workers control of all of the surplus value that they produce and the conditions under which they produce it rather than giving profits to owners. Owners who also work can be compensated purely for the latter.
The smaller the company, the better idea I think that would be. I've heard some compensation practices are illegal but this sounds doable. (The government doesn't want a private company to promise to take care of all your needs: but it is going to cost you everything you can ever earn... and then some so you die owing your employer). I could see an issue. I heard a guy on talk radio ask why banks won't lend him money to buy a house. If he has to pay rent and has an established history of doing so, he can just as easily pay a mortgage. I'd think the bank is thinking, "we need you to pay your rent as we need your land lord to pay us back money we already lent him." You want a loan to start a business in which profits are shared with workers. That same banker may be thinking, but I want to lend to someone increasing my profits, not the laborers.
Still, the Federal Government has the SBA. I wonder if they can/do help out in this manner? What would other bars would there be to businesses doing this? The manager/owner gets staff motivated to work harder with less supervision to increase profits that increase their own take home pay. The worker makes earns more by making more (A justification made by many sales people for why they do what they do: freedom to work as hard as they want for the money they want.) Some jobs are piece meal: they get paid by how much they produce. Such places have the reputation of being sweat shops. It's got to be better than working for next to nothing.
Agreed. Adam Smith himself said that landlords are essentially useless because they produce nothing.
Also, free college and health insurance, paid sick leave and parental leave, a UBI, and a total abandonment of the Chicago school idea that businesses exist only to enrich their shareholders.
Gotta look up UBI. EDIT:
https://time.com/4737956/universal-basic-income/ ahah! Charles Murray would agree. We have huge, nosey bureaucracies that dole out certain social benefits: food stamps, housing vouchers, etc. which are inefficient and intrusive. Murray posits that it is a better idea to simply have a UBI. That a person can spend their own money better than a 3rd party can spend other people's money on them. To date, I understand UBI has been tried and considered a failure. Some examining failing results state the experiment failed in certain ways. It has not been tried correctly. I hope the idea is further examined.
Got to disagree with Adam Smith about Land Lords. My own grandfather on my dad's side was one part time. He owned a 3 family house. His family lived in one, the rent from the other 2 paid the mortgage. So, in a sense, he managed finances in a manner that provided housing to 2 other families. And if anything went wrong, it was up to him to fix it. They used to call NYC the city of nomads. People owned little enough that each season, tenants could move to whatever landlord was offering the bigger better deal. Nowadays, one problem is, we have too much stuff. Would you move from one apartment to another to save $50 a month?
Course, there are other ways for a society to provide housing. But to say a landlord today adds no value seems extreme.
A change I would make: you must put at least 25% down on a house. And mortgages may be for no longer than 10 years.
At first, houses might be smaller as the banks will not be able to lend as much. Not a bad thing. (When I was young, broke and a new parent, the bank offered me and the missus about $350K for a house on a 30 year. Cool. Taking such a loan means I don't eat. And I'm competing with other people that WILL take that loan, even if they cannot really pay it back). With 25% down, people have more skin in the game and a greater interest in getting value for their money. A housing crash will not have as big an impact on the banks which has an impact on the greater society. The bank also will likely get a taste of people saving that 25% so there is a win there for them as well.
People will also have an easier time of walking away from an underpaying job as they aren't worried about a 30 year mortgage. I think that would allow people greater freedom to demand greater pay. (I've heard the mortgage interest deduction for taxes and other incentives from the government were to get workers trapped in such loans. Makes it harder to walk away from an under paying job or help in forming a labor union).