Comment by JuniperMesos
14 hours ago
I own FAANG stock because I own the S&P 500 in my retirement accounts, and so do managed pension funds. There's a lot more than billionaires who benefit from FAANG shares going up in value.
14 hours ago
I own FAANG stock because I own the S&P 500 in my retirement accounts, and so do managed pension funds. There's a lot more than billionaires who benefit from FAANG shares going up in value.
It's true that the current pension provision depends on this. But if pensions are mainly funded by companies which extract monopoly rent, then it would actually be more efficient and be less distortionary to the competitive market to fund them directly out of taxation - one big, simple rent instead of 100,000 different ones clogging everything up.
Are US retirement accounts largely growing on the back of “companies which extract monopoly rent”?
That seems outlandish. My iPhone isn’t “rent”, neither is an Nvidia GPU, or an Instagram ad.
The argument works at the margin as well, though. Suppose companies deliver value X and also extract rent Y, and defend Y on the basis that it would threaten the value of pensions to prevent it - this is rebutted in the same way.
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Aren't you worried about the circle-funding these companies indulge in when your pnsion depends on it? For example Nvidias's dubious deals with Huangs charity? If something goes sideways there, $5T are at stake: https://www.youtube.com/watch?v=xUbJDrL6ZfM
I agree, the sentiment that billionaires are the only beneficiaries of share value increases is misinformed, but the mentality of profit chasing is a long term security risk not just to the nation, but to the continued rise in value of said shares. Once China has enough of a grip on their domestic attempts at semiconductor fabrication, these company's supply chains will be completely compromised, allowing China to practically swap out any of these FAANG companies for Chinese counterparts over time. As long as the US, UK, EU and FAANG continue to do next to nothing to develop domestic chip fabs and supply chains, it is only a matter of time.
This is a general argument in favor of protectionist tariffs and against free trade.