>Inequality doesn't materially harm anyone as long as it's caused by the rich

Asset inflation disagrees with you. You end up in a situation where you make more money, and you can buy more stuff, except stuff in a few particular but important categories. For example physical properties.

The term you're looking for is "real wages". Obviously I'm not claiming that someone making the same nominal wage in 1980 as they do now in 2026 is just as well off. That would count as "getting poorer".

US median real wages, for reference: https://fred.stlouisfed.org/series/LES1252881600Q

That doesn't account for the growing asymmetry in the CPI. In the CPI, the asset bubble really only shows up as housing and perhaps transportation. Meanwhile consumer goods go down to compensate (as you'd expect from CPI being in the feedback path for the monetary creation "operational amplifier"). So we're left with everyday expenses continuing to be affordable (eg food, toiletries) while life expenses become ever more unaffordable (eg buying a house).

If you want to refute the argument, you have to find a graph of wages normalized in terms of the cost of a starter home in areas with active economies. But I suspect that is going to be hard.

Yes, if you cherry pick a few things that are disproportionately going up in price and say inflation should be calculated based solely on those things then you can make the numbers look worse. Or the reverse if you cherry pick things that are going down in price. I don't think either of those would be a more reasonable approach than looking at CPI.

It's not a "cherry pick" - the critique is specifically about the asset bubble. Owning assets is what it takes to be economically enfranchised in our system. Even though the asset bubble encompasses much more than just housing, I was meeting you halfway by focusing on where the asset bubble connects to the CPI metric. But with this response it seems as if you're intentionally trying to dodge the issue by focusing on the CPI.

I guess I would just disagree and say that having money makes you "economically enfranchised" by definition. That's why I'm talking about CPI.

If you ignore CPI in favor of solely looking at who can afford to buy real estate in big cities ("areas with active economies") then yes, perhaps things have gotten worse, but I'm saying that's the wrong metric to be looking at.

It's not a wrong metric, but rather it is highly relevant - the ideal of individual home ownership has long been a staple of the American middle class. That its attainability has changed is worth focusing on.

It's good that most people can still afford food, toiletries, and other sundry expenses. But it's not really relevant to this conversation. And if this does change as well, that will be a different discussion.

Nobody is denying it's relevant, that's why it's tracked as part of the CPI. All the goods and services measured by CPI are a "staple of American middle class", that's why they're on that list in the first place. Some are getting more expensive, some are getting cheaper. Singling out one that happens to be getting more expensive and pointing to that in isolation as evidence of material harm, while dismissing the others as "not relevant to this conversation" is missing the forest for the trees. Money is fungible; if you find yourself spending less in one category then you can afford to spend more in another with no net impact on your finances.

Housing prices are certainly an interesting topic worthy of their own discussion, but this is a thread about a group of middle class Americans becoming more wealthy. It's incorrect to measure wealth solely in terms of property ownership while ignoring everything else.

You're denying its relevant right here. For starters, the cost of home ownership is not tracked by the CPI - rather rent and equivalent rent are.

If we're discussing wealth, that means something different than merely a level of income and expenses, but rather having resources (including saved resources) that give one economic power to make their own (usually better) choices. Being able to afford food and sundries is not wealth. Even buying premium brands or not worrying about sales does not imply wealth in and of itself. Being able to rent, even a nicer/bigger apartment than strictly necessary, is not wealth. Being able to buy a home, where you're now making larger-scale economic decisions (rather than merely accepting whatever your landlord has decided), that is wealth. And one of the bedrock assumptions of our capitalist economy is having this kind of distributed wealth where individuals are making decisions over their little domains - eg do I install these solar panels that will cost me much more money than I am paying for electricity right now, but will pay me back over a period of 10 years.

This ties back to the failings of framing the CPI - big ticket purchases are infrequent and thus statistically making up a smaller portion of an average. But when an individual is staring them down, that increased big-ticket price becomes acutely relevant. When consumers then tend to settle for cheaper options, the aggregate amount spent goes down and the price inflation is then not reflected in the CPI. As just another metric we could give this a pass for the inherent difficulties of measuring such things. But as the metric is a critical part of the feedback path for monetary creation, it's exactly those shortcomings that become magnified.

I mean if those things are housing, medical care, and education that's not really cherry picking at all.

Yes it is. CPI already takes those things into account. If you ignore all other living costs in favor of just looking at those three things because they're the things that are going up the most then you're not getting an accurate measurement of purchasing power.

Note that a similar effect has now moved into traditionally consumer markets as well. It started showing at the grassroots with hoarding toilet paper and whatnot during the first Grump catastrophe, but has now solidified with things like completely fucking up the market for computing hardware.

I think I liked it better when the elites mainly conspired while playing mega golf - having that as the social attractor made for a naturally limiting effect on the imaginations of the people poised to do damage. If you would have gone to most coaches of distance-pissing teams (eg Gold Mansacks) in the 90's and asked for trillions of dollars to buy up all the RAM chips, you would have gotten answers on the order of "Kernel who?!". Now they're like "this guy looks like a serious nerd, we better not get left behind!"

Eh, I won't say buying up of commodities to manipulate markets is a new things exactly. Hell, look up the "Onion futures act". I think maybe the change here is a more of an institutional collapse of government entities that would attempt to stop this.

Another new thing is that the disruption is framed in terms of a purportedly productive-investment purpose, getting more people and capital onboard. Also with the coordinated irrationality there is a lot more momentum for priming a pump that will endure long term. Sure we can fantasize that all of these datacenter buildouts will go bust, leading to a glut of RAM and we can party like it's 2001. But does anybody think that will actually happen?

I'd say the real upstream problem is the lack of new "thick" business creation. Which is a tough thing to analyze in terms of semiconductor fabs, as they are notoriously centralized-capital-intensive regardless. So I'm not looking to flesh out that argument in this context, but it does fit the anti-competitive less-efficient market pattern I've noticed across the board.

The main pressure relief valve on the horizon seems to be China building new fabs, but that kind of demonstrates how our own Western-aligned market has eaten itself.

Inequality is inherently bad for dynamic market economies. Often the argument is that increasing inequality is fine if the economy is growing and the lower classes aren't losing income but inequality also slows growth as more of the investment goes to consumption for fewer and fewer people. So economically I agree that inequality is not zero sum but it seems like inequality lowers the total productivity of the economy in the long term (so it's net-negative sum).

This is in addition there are effects on the civics and reduction in welfare of people. Like many things in economics, inequality is a hard thing to do good experiments on but the data suggest that inequality itself has a host of effects that you're ignoring.

This article is a decent primer on the effect of inequality and what we know and don't know (and also some of the difficulties studying it): https://en.wikipedia.org/wiki/Effects_of_economic_inequality

Edit: there's a lot of literature on this. If you use Google scholar you can find tons of articles talking about the various effects of inequality (though as always with economics, the papers struggle to get good data). Modern economics definitely doesn't view it as an isolated and benign thing.

> inequality is a hard thing to do good experiments

> the papers struggle to get good data

Note also that I'm specifically talking about inequality in isolation ("as long as it's caused by the rich getting richer and not by the poor getting poorer"), which I would argue is even harder to study.

It would be completely unsurprising to learn high inequality is correlated with higher rates of poverty, which is correlated with all sorts of other negative causes and effects. I don't know how you could control for that well enough to be able to convincingly claim that inequality itself is what's causing the problem and not the poverty (or the underlying causes thereof).

I would also acknowledge higher inequality certainly makes people envious, and that that probably has some negative societal effects. But I don't know I'd go so far as to count making someone envious as "materially harming" them even if there are other significant downstream effects to that.

I'll admit there's a lot more reading up I could do on this, but it would take a lot to convince me of the idea that making one group of people wealthier without hurting anyone else's finances is a net negative on society merely because it "increases inequality".

My point is that inequality in isolation doesn't happen. It's a hypothetical that doesn't exist. It's like talking about sugar and ignoring calories

Except in this case we're commenting on a thread about the middle class getting wealthier, and you implied that's a bad thing because, in isolation, the middle class getting wealthier increases inequality. (Apologies if that's not what you were trying to say.) My point is I don't think that's the right way to look at this news.

That's just another way of describing a scenerio where the "poor are getting poorer". Focusing on the share of the pie ("inequality") is a red herring, if the poor are getting less wealthy in absolute terms that's bad regardless of whether inequality is increasing or decreasing.

Depends on how poverty is being measured.

Many measure it in terms of money and not the sum total of goods and services that they can claim. Infact in lay person literature it is usually measured in terms money (+ liquid assets), at best inflation adjusted if they are comparing different times.

This why one needs to think in terms of the 'pie'.

> if the poor are getting less wealthy in absolute terms that's bad regardless of whether inequality is increasing or decreasing.

In complete agreement with that. I did not realise that my comment conveyed the opposite.

No, inequality is bad because money buys political power. Using some made-up numbers:

Say a typical cost of living is $50,000 per year. If you make $100,000 per year after tax, you can spend that extra $50,000 per year on political efforts - Lobbying, propaganda, political campaigns, soft power, hard power, land-grabs, etc.

If you have a billion dollars, you make about 30 million per year in returns. Cost of living is a rounding error.

Every billionaire is capable of outspending 600 six-figure software engineers, while sitting on their ass all day every day, or networking, or playing tennis. I think they realize this.

Do you think it is dangerous for a civilization when someone can dedicate all their waking hours to amassing power through any means possible, while they have more financial power than 600 middle-class people?