Are We Doomed By Millennials Inheriting Cash? J.D. Tuccille Debates 'the largest inter-generational wealth transfer in history' on HuffPost Live

aldenjewell / Foter

The latest pundit to warn that millennials will doom us all is Robert Reich, who writes at the Huffington Post that "we're on the cusp of the largest inter-generational wealth transfer in history" with those darned kids as the unworthy beneficiaries. He cautions that "the super rich have invested in businesses, real estate, art, and other assets," and that this is a bad thing that needs to be stopped lest it keep happening. Being Robert Reich, he wants to tax the hell out of it.

I debated the point on HuffPost Live with Richard Eskow of the Campaign for America's Future, and the Huffington Post's own Zach Carter. I made the point that income mobility is still strong, and that the folks at the top in one decade aren't necessarily those there 20 years later, which makes for an awfully short-lived "permanent aristocracy." And there's nothing wrong with leaving your money to the kids, since it's not stolen from a pot that would otherwise be shared with everybody else.

I also suggested that we clear away regulatory hurdles to entrepreneurship and avoid discouraging investment, so that everybody has a chance to piss off Robert Reich.

Comments

[Brandon]

Nope. As usual, The Tiny Shrew is wrong.

[Almanian!]

JD, should the opportunity ever present itself - like a live debate, or something - please punch Reich in the throat, if at all possible.

Thanks,

Most People in the World

[Mainer2]

Might be easier to knee him in the throat.

[Almanian!]

+1 size differential

[Wasteland Wanderer]

Employ a "lateral neck hold". They seem to be super effective.

[Notorious G.K.C.]

It's more of a massage really, not a hold...in fact, it clears the breathing passages.

[Pl?ya Manhattan.]

"we're on the cusp of the largest inter-generational wealth transfer in history"

Until the next generation.

[Mainer2]

^This.

I definitely recall the same thing being said about the Baby Boomers inheriting from the WW2 generation. And it made no sense to me at that time either. People are dying and their heirs inheriting all the time. The idea that there is some specific point in time for a generational transfer is nonsensical.

[CE]

As if Baby Boomers saved any money! Their average net worth is about 100K, if you count their houses. They'll be living off us, not funding a generation of trust fund slackers.

[Episiarch]

Is he talking about Social Security and Obamacare?

[Pl?ya Manhattan.]

Slow Clap.

[Len Bias]

"Until the next generation."

Not if Robert Reich can do something about it.

[hamilton]

"Pissing off Robert Reich" would in fact be a sure-fire business model, if you could put it together. I'd be in for a few grand.

[Dances-with-Trolls]

which makes for an awfully short-lived "permanent aristocracy."

If you want to move from evul 1%er to actual American aristocracy you have to marry that money to political power. Pretty much as it has always been.

"Gold is for the mistress ? silver for the maid ?
Copper for the craftsman cunning at his trade."
"Good!" said the Baron, sitting in his hall,
"But Iron ? Cold Iron ? is master of them all."

[Fist of Etiquette]

That's the government's money.

[Scruffy Nerfherder]

You didn't print that.

[alan_s]

But what do millenials think about this? Has there been a poll?

[Dances-with-Trolls]

87% agreed that the Liberal Stasis Fantasy sounded great up until they realized how much they stood to gain when the old man kicked off.

[Scruffy Nerfherder]

Reich is a repugnant little shit. I hope he gets trampled in an OWS stampede.

[Sudden]

He's also entirely mendacious and finds a way to present data to fit his narrative.

Nearly three-quarters of those over age 69, and 61 percent of boomers (between the ages of 50 and 68), were the first in their generation to accumulate significant wealth.

But the bank found inherited wealth far more common among rich millennials under age 35.

He presents this as though it is some indication of a greater and greater number of people becoming rich via inheritance. The reality is that, outside of a revolutionary patent, career in professional sports and/or entertainment, or some ridiculously innovative business, accumulating $3 million in investable assets (the surveyed level of wealth) before you hit 35 is profoundly difficult. Wealth is a long game for most people. It stands to reason that those with such levels of wealth that are under 35 would be overly represented in the inheritance crowd but that those numbers would return to near historical averages as the millennial generation ages.

[Calidissident]

Not to mention isn't it totally expected that the first generation to accumulate significant wealth would pass it on to their kids, increasing the number of people who get significant money from an inheritance.

[CE]

Shorter version:

75% of rich people earned it themselves.

Less than 75% of rich people under 35 earned it themselves.

Talk about cherry picking your data points.

[Mainer2]

Reich is a proponent of the Willy Sutton school of taxation.

[PapayaSF]

Wait, the rich have been "investing in assets"? And not just hoarding cash in pools like Scrooge McDuck? Something Must Be Done.

[Corning]

Actually it looks like the best way to give your kids your wealth when you pass is to bury gold in the back yard.

[PapayaSF]

Unintended consequences for the win!

[CE]

Just don't put it in a safe deposit box.

[Scarecrow Repair]

Ah, my favorite expression when it coomes to Piketty et al disparaging wealth, as if rich folks just collect cash and gold and jewels in pools so they can swim in it.

I follow up with the idea that if you took 80% of their wealth, you'd end up holding stocks and bonds, and not the spendable cash the grabbers want to get their hands on. To turn it into actual spendable cash, you'd have to sell it, and the only people who could buy it have just had 80% of their assets stolen.

Like asking what a dog would do if it ever caught a car ....

[PapayaSF]

There's a famous story, perhaps apocryphal, of some Gilded Age robber baron confronted by a socialist who demanded he liquidate his wealth and share it with the world's population. The baron did some calculations and handed the socialist his share, something like 35 cents.

[Ayatollah Savaranola]

I forgot where I read it,when Cortez and his conquistadors marched though Mexico and acquired loot they divided it equally. The conqs were so pissed off at the small amount they received they tossed it back. Cortez had the rejected loot stashed behind a curtain, building up a large retirement fund for him and a few selected pals.

[Corning]

If those kids know what they are doing they will keep the wealth their parents produced...ie they will produce shit and it will be taxed.

If those kids don't know what they are doing they will lose it...ie they will spend it and it will be taxed.

Why is this a problem?

Also millennial are going to get everything anyway...this is kind of how death works. You don't get to keep it when you are dead.

[Sudden]

I've had a sneaking suspicion that the boomers would, if they had the chance, be buried in monumental pyramids with all of their hoarded lucre smelted down and turned into an ornate sarcophagus that would provide their vessel to the afterlife..

[pan fried wylie]

Thankfully, they didn't teach their kids the value of hard work, so digging up that lucre would be totally impossible.

[Ayatollah Savaranola]

Will monumental pyramids schemes make do?

[CE]

It's a problem because the government is stealing from them in both cases.

[Whahappan?]

The evil shit wants the government to get it, not the heirs.

[ant1sthenes]

"and that the folks at the top in one decade aren't necessarily those there 20 years later, which makes for an awfully short-lived "permanent aristocracy.""

Well, excluding political families.

[CE]

Do you have a newsletter I can subscribe to? What speaking fee do you charge?

[CE]

And is your daughter available?

[Corning]

invested in businesses

Nice. Well this is one sure way to insure small businesses close every 20 to 30 years or so and large corporations don't.

We can't let those pesky upstarts playing on a level playing field now can we.

[Notorious G.K.C.]

Why do these corprut executives focus on the short term, and not the long-term health of their businesses and the economy?

And by the way, we have to stop these rich people earning wealth for the benefit of their children after their death. They should just spend the money while they're alive, and the government should take what's left via an estate tax!

[Libertarian]

You know who else was in favor of a Reich?

[Redmanfms]

I made the point that income mobility is still strong, and that the folks at the top in one decade aren't necessarily those there 20 years later, which makes for an awfully short-lived "permanent aristocracy."

So what if they did maintain wealth for multiple generations? Seriously. Some indolent little fucker inheriting his dad's billions doesn't make it anymore difficult for me to make my fortune. If anything that indolent fucker will actually make it easier because of the pre-existing infrastructure (jobs, businesses to sell my products to, etc.) that his filthy inherited fortune would actually be.

Unless the kid completely liquidates his daddies' assets and spends it on shiny toys that money will stay invested in business infrastructure and he'll just be living large off the interest. And even if he liquidates and buys shiny shit, many people will be employed and become wealthy making his toys.

Seriously 2-Chili, you need to stop arguing with these mendacious thieving scum by appealing to their ends.

[SKR]

What a crock of shit. Due to the abandonment of primogeniture it will also be the greatest dillution of wealth in history. The wealthy aren't maintaining a consolidated estate like the British aristocracy did. They are making a shit ton of money and then dividing it up amonst their kids. If they have 2 kids then each of those kids is by default half as wealthy as their parents.

[Ayatollah Savaranola]

How come after the great depression and schemes to avoid inherited wealth, we're still up to our asses in Rockefellers and Kennedys?