Piketty, abridged

I recently finished a book on capitalism by French economist Thomas Piketty. It's attracting a lot of buzz because he has looked at more series of data over longer periods in more countries than anyone before him to reveal the underlying machinery of capitalism.

In very very short form, his findings:

The concentration of wealth that preceded the First World War (the Belle Epoque era captured in Jane Austen and de Balzac) has returned. Where once the masters of the universe lived off the rents from their properties and inheritance, we now have a combination of rentiers and super managers, whose peers seem easily convinced that last year's $200 million salary and bonus should rightly be $300 million this year.
The more money you have, the more you make. Think Harvard endowment and the mega wealthy, who have access to financial managers and investments that we little folk do not.
In an era of slow growth, which Piketty forsees for decades, capital (investments, real estate, intellectual property) trumps labor. i.e. capital can earn a greater return than workers can when the economy is sluggish. This means the extremely wealthy will pull further ahead with each year.

There were many distressing statistics about the concentration of wealth. And of the infrastructure that perpetuates it: "Throughout most of the twentieth century and still today the available data suggest that social mobility has been and remains lower in the United States than in Europe." He explains that "the proportion of college degrees earned by (American) children whose parents belong to the bottom two quartiles of the income hierarchy stagnated at 10-20% in 1970-2010, while it rose from 40% to 80% for children with parents in the top quartile."

Other countries tax their citizens more heavily than the U.S., in return for which their citizens get free health care and a very modestly priced education, including college. The exorbitant price of a college education in the U.S. is throwing sand in the gears of social mobility.

I had a few more sections highlighted that I will share on other days when I don't have much to report. Today all we did was drive around and look at houses and fret over our future.
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