Feel free to look at dividend yields, but I can pretty much guarantee that it has not halfed in the period the stock market doubled. Most likely it stayed relatively flat, somewhere between 1.5% and 2%.

So if you had 100 million you would get 1.7 million as dividend 5-7 years ago, now it's roughly doubled, without selling any of your stocks.

Not that it really matters. Given how much faster the stock market grows compared to salaries you can sell a few percentages of your wealth every year, and still get richerer by doing nothing besides owning.

If you want a flow, here you go: https://fred.stlouisfed.org/series/A053RC1Q027SBEA

Corporate profits in the U.S. have almost doubled since 2019.

It's not quite as bunk as that. If you take the time-derivative of the stock price it becomes a flow, and as stock prices are approximately exponential, the growth rate will be half of what it is today at approximately the same time range that the value itself was half of what it is today. (Obviously, with a lot more noise added).

Good point. Doubling in 7 years means around 10% growth per year. So, if someone took out 10% of their stock nest-egg per year, it wouldn't have grown at all.

Having said that, GP does illustrate Picketty's point in Capital in the Twenty-First Century that r>g, that is return on capital is greater than economic growth, and Picketty did theorise that this would inevitably lead to concentration of wealth (unless war or other calamities reset the scale).

At the risk of being pedantic, is a "piggy bank" really the right metaphor for this? A piggy bank has actual money within it, regardless of what I think of the piggy bank, it still has money within it. While a stock's total market cap technically only represents the last transaction price multiplied by the number of outstanding shares (kinda). Anyway, just making the point that it isn't like a "bank" in that there is not money in a container of any sort (obviously, banks lend out their own deposits so even my correction is also wrong).

I'm don't have anything better to replace it with, but I am just questioning the "piggy bank" as a metaphor here.

> Moreover stock prices incorporate a variety of factors that are irrelevant to wealth distribution.

This handwaves away the most important fact w.r.t. stocks and wealth distribution, which is that wealthy people own stocks and poor people don't. A whopping 38% of Americans don't own any stock.

Isn't the point still valid if you consider just the return on capital? If the market cap of the S&P500 was about 18 trillion in 2015 and returns 10%, the income going to to the owners of that capital is 1.8 trillion. In 2025 the market cap is 53 trillion, and a 10% return is then 5.3 trillion. That's an increase of almost 300%.

Now if the average salary was 48,000 in 2015 and there were 150 million people employed in the us, that's 7.2 trillion. The 2025 average is about 66,000 with 160 million employed. That's about 10 trillion. Around 40% increase in income going to labor. Am I missing something?

People who have less flow and no stock can increase their savings less than those with stock and the same flow. Many are not able to save at all. Those without stock receive only flow. Those with stock receive both flow and stock, and those with more stock profit more from rising stock.

So the relationship between stock and “flow” is absolutely relevant if we want to understand wealth inequality, because the working class primarily receives money through wages (most of it going out to pay for things such as basic necessities), with the ownership class accruing profit that they receive by virtue of ownership.

Another way to say that is comparing velocity to distance traveled is not meaningful.

it doesnt really matter if there are bars of gold to backup the value of a company's market cap. the point is that you can sell the shares for money, and to further emphasize this, you're literally taxed on that gain just like income tax (though annoyingly much lower, which further reinforces mistreatment of working class).

This doesn't contadict that rich renters have it better than actual workers - sucking the riches they produce. You are just pointing out some of the reasons why.

It's going to get dicey when millions are no longer needed for labor or to consume goods (keep the economic engine going). Oh and amoral robots can do the dirty work ...

Layoffs contribute to the average worker taking a paycut. And we are seeing layoffs even in a market that is soaring. Why do you think that workers wouldn't be affected during a downturn?

Every company that goes down 30% cuts a ton of workers, that's way worse than just a pay cut.

they lay people off they don't give pay cuts

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> I assume the United Kingdom of Great Britain must be a paradise for the workers, right?

As a proud citizen and indeed worker of ol' Blighty I assure you it's a paradise of unequalled benevolence. Every worker a member of the board.

China is flat compared to 10 years ago so yeah I think this argument checks out?

The whole stock market on fire is really a US-specific phenomenon.

https://tradingeconomics.com/china/stock-market

Going back 50 years is the mid-late part of the post-WW2 economic boom. Sure, you can have that kind of growth back but only if you're willing to go through World War 3 to get to it.

The tax cuts and other regulatory shifts allowing things like share buyback and the carried interest loophole (might be closed now) have shifted up the share of the GDP held by the top 10%. This has slowed the velocity of income, as a wealthy person doesn't spend their income the same month the way a person in lower quin-tiles does. This has caused a stagnation in middle class standards of living. This is a headwind that didn't exist 60 or 70 years ago. There was also a demographic advantage as WW2 had thinned the heard and there was a once ever level of economic prosperity. The tax code encouraged big business to invest in labor, which isn't happening now.

> income inequality distribution

Money in a capitalist society is not distributed, it is created.

The elephant in the room is the amount of money vacuumed up by the government which then disappears. Remember the Fire Aid for the LA fires victims? They raised $100m which disappeared without a trace. Then there's all that money for the California bullet train. Still no track laid.

Inflation is important yes, but it hits the stocks and salaries the same. So the ratio between them are the same, and the moral of the story, that most of the wealth goes to the owners, remains.

But yeah, how amazing the productivity increase actually is is a bit more complicated.

There are waves and eddies in a river, but overall the water still flows downhill.

Now more and more people in red states are asking about healthcare. Seems like they could or should be capitalizing on this, unless the parties are going to flip on this issue to keep their power balance.

The US is starting to reorganize by class, the union laborers are voting for anti-union candidates.

Can't speak for anyone but myself of course, but I was pretty disappointed with the way Democrats under Obama tackled healthcare.

One of the big differences between Obama and Clinton in the primaries was that Clinton was in favor of an individual mandate, and Obama was not. We still ended up with an individual mandate, which is both offensive on grounds that the government is forcing you to find and pay for insurance (not always easy on the exchange), and on the grounds that the primary purpose of the mandate is to ensure that insurance companies stay profitable.

Former Al Gore running mate and future republican Joe Lieberman is often given credit for stopping the nationwide insurance exchange in favor of state-level exchanges, again tipping the market in favor of insurers.

Ending denials for pre-existing conditions was nice, as were a few of the other details, but it felt like a far cry from the hope and change voters were promised. Mostly it exposed more-of-the-same pandering to the rich and powerful. Last I checked Medicare For All polls quite favorably.

its not difficult - it's that they very clearly HATE class consciousness. just look back at occupy wallstreet. it got coverage that was nearly universally mocking it and sneering at it, and the second they were able to ignore it and pretend it didnt exist anymore, corporate news moved on.

everything is framed as us-vs-them in corporate news, and its usually one political party against another, and it's usually for stuff that doesn't impact us nearly as much as wealth and income inequality, campaign finance reform, or general election methodology reform. this is why establishment hated bernie, it's one of his biggest talking points.

corporate news is garbage, its owned by billionaires literally to control the narrative. you think bezos bought WaPo to make money? of course not, it's a money pit.

Real wages are up and quality of life is on average better than it's ever been. But news organizations do in fact report on self-reported data periodically like living paycheck-to-paycheck (which just means they spend everything and don't save).

Self-reported sentiments about stress are not useful. Rich boomers who voted for Trump would take this poll and just as easily say the cost of groceries is a major source of stress.

Please edit out swipes and name-calling from your posts to HN, as the site guidelines request: https://news.ycombinator.com/newsguidelines.html.

Edit: You did it elsewhere in this thread too - https://news.ycombinator.com/item?id=44840174. That's not cool, regardless of how wrong someone is or you feel they are.

Fortunately, your recent comment history looks fairly free of this kind of thing (that's good), so it should be easy to fix.

The math in the statement is correct in the short term. If the risk-free rate is around 3% and the equity risk premium is about 4%, the expected return on stocks would be roughly 7% a year, which would double values in about 10–11 years using the Rule of 72. That doubling could occur for a time even without productivity growth, as companies can boost earnings through pricing power, cost-cutting, or financial engineering.

Over the long run, though, sustained returns depend on fundamentals like productivity growth, population growth, and inflation. Without productivity gains, corporate profits would eventually stagnate, making it difficult to maintain a 7% annual return. Risk premiums, interest rates, and valuations also change over time, so fixed assumptions rarely hold for decades. In short, the doubling math works, but it oversimplifies the economic reality that long-term stock growth ultimately relies on productivity.

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