Giving up all that avocado toast and those lattes seems to have added up in the end because Millennials are now wealthier than Baby Boomers were at the same age. However, there is some important nuance: The difference between Millennials who are doing well and those who are not is wider than it was when Baby Boomers were in their prime.
As the United States returns to a normalized interest rate environment, things are going to get interesting. A few of my personal thoughts on the situation in which we, as a country, now find ourselves.
Keeping an eye on numerous individual companies, as well as a broad array of economic data, I am far more optimistic about the next ten years than I was this time last month. Yes, there will still be challenges, but it looks like much of the worst-case scenario has been averted. Now, it’s about navigating the problems we will encounter due to the specific policy decisions made in the midst of the pandemic.
The masterpiece Middlemarch, a Study of Provincial Life is considered by many literary critics and academics to be the greatest novel written in the history of the English language. A work of historical fiction, the story is set during the years 1829-1832 and follows the lives of the inhabitants of a fictional town, Middlemarch, as threads, both visible and invisible, weave the fate of their their homes, marriages, businesses, fortunes, happiness, and misery together.
Politicians, central bankers, and academics around the world are engaging in a conversation that could have massive real-world consequences for both middle class families and retirees; conversations that could result in substantially higher taxes, and/or substantially reduced benefits for entitlement programs such as Social Security, depending upon how the matter is resolved. The average American is not paying attention to this at all. It matters. This is a technical debate that will transfer huge amounts of wealth from various stakeholders depending upon who prevails.
For as long as I can remember, one of my “must read” annual reports has been that of a regional bank called M&T Bank Corporation. This particular bank is legendary among investors for several reasons.
In August of 2014, I wrote a post called Lies, Damn Lies, and Statistics. I penned it because, at the time, I was seeing a lot of situations in the media in which data was being used to push a political agenda on either the far right or the far left. I’m now seeing this same sort of deception in discussions about wealth inequality.
As many of you know, Elizabeth Warren has been getting a lot of press lately after proposing a wealth tax equal to 2.00% on fortunes above $50 million and 3.00% on fortunes above $1 billion. As an academic exercise, it’s useful to consider what that would mean for the United States.
In recent years, the United States Federal Government has found itself in the fortunate position of collecting more inflation-adjusted, real purchasing power tax revenue than it has during any other period of its 242 year history. For the government’s 2019 fiscal year, tax receipts at the Federal level are expected to balloon to an almost unfathomable $3.422 trillion.
As the top 20% and bottom 80% further divide, one of the things I’ve found interesting over the past few years is the difference in how both groups use something called the subjunctive mood in their speech and writing. The top 20% nearly always uses it correctly. I suspect it’s become a sort of subconscious signaling code without the people doing it even realizing what is happening.
