A Simple Question about the Current US Economy

The guy is just a student.

The guy is just a student.

Noted. I am being gentle : )

That's a double win for everyone, so you should encourage more of what Musk is doing. And also objectively realize that Musk is undercompensated for the wealth he created due to the fact people gave him less money than the product was worth.

No, but I can replace an Elon Musk who makes hundreds of billions with an Elon Musk who makes hundreds of thousands.

You cant really expect for people to understand your point of view. These are all very rich people who eat a very significant piece of society's cake. You cant expect them to understand those who barely have any cake to eat.

And where are you getting that money? From taxpayers. So you are forcing people to invest, just indirectly.

Why not? Additional money being invested is good.

Someone like Musk is doing more than just investing, they also make high-stakes decisions on how companies are run. I suppose you could replace that with central planning, but then you just reinvented the Soviet Union.

I care about maximizing the well-being of as many people as possible, and I would hope that you do too. As for the people buying those products, what part of my proposal would stop them from buying the same products at the same prices? 

The way that I have proposed that we do this also has the nice side effect of potentially making this giant flow of resources even bigger by making investing something you need actual qualifications for while giving the investors the opportunity to invest far more money than they would have been able to otherwise.

There are already people— fund managers— privately employed to do that. Would you prefer that only government could employ fund managers? 

People get into investing chiefly to accumulate and control wealth. If you take away that control from investors, they are then disincentivized to put as much money, time, and effort into investing. 

How do you believe, say, Tesla stock tanking negatively affects the rest of us?

You think that a person’s stock shares should be confiscated past a certain point? Musk is not even a stock investor per se. He is an entrepreneur and innovator and hence a creator of wealth. His investments are mainly in companies which he has created and led. Do you think the government should take over ownership of his companies?

Realize that Musk wouldn’t even have attained such wealth in the first place under the confiscatory system you suggest. Your system only has large amounts of wealth to confiscate because it was accumulated up until now under a totally different system. Your system will not accumulate much wealth going forward from the time it is implemented. The government’s share will then get smaller and smaller over time. This is a huge flaw in your suggestion.

it would be invested responsibly on their behalf

rather than us trusting ordinary people with the weapon of potential mass financial destruction that we call investing

We would still have people like Elon Musk making investments and independently deciding how companies are run. They just wouldn't be making billions anymore.

 but the government would have control over the massive funds for those companies. 

So economic fascism. Government control over private property

Because there's no substitute for Musk, and removing the incentive to create wealth for millions of people with a product they pay Musk less than it's worth would impoverish millions with the removal of the product Musk created. Killing geese that lay gold eggs makes everyone poorer.

The obvious trade off here is freedom. The government could choose what clothes people wear, what food they buy, etc. But to some extent, we let people make their own choices. And it's not like politicians are known to be super ethical where the stock market is involved.

How do you know which people are good at investing or running companies? Really hard to tell until it happens. Is everyone given practice money to invest? How do we know the "good" investors will bother to work hard if they don't have the chance of becoming super rich?

Would Elon Musk work that hard to invest without the incentive of being a billionaire? That prospect clearly does motivate some people. And while it's a lot of money to one person, it's pennies compared to the value of his companies. If Elon making millions instead of billions makes his companies 10% less efficient, that tradeoff isn't worth it. Talent or no, slight differences in the performance of a few people has a huge impact on their companies.

So economic fascism. Government control over private property. We have a record of history to show exactly why that system  fails.

Who says that we're letting politicians decide which companies stay, which companies go, and what to invest in? We could have rules in place

I am proposing that people would be educated in investing, presumably this could culminate in some kind of test to prove their ability to make fruitful investments.

I'm not going to attempt to deny that hundreds of billions of dollars is a far greater incentive than hundreds of thousands of dollars. Even so, we don't offer people billions to be professors and yet they still are. (I choose "professor" specifically because it is a position that doesn't pay any ludicrous amount of money yet requires a lot of background knowledge. Once again, people still become professors.) No, being a professor doesn't require you to risk your own money, but in my proposed economy, nor would investing.

Oh, would you say it doesn't negatively affect us in any way? Sure. We can go with that. Tesla stock tanking does not negatively affect the rest of us. This supports your argument how?

I am not suggesting any such thing. Nothing would be confiscated, because no one would be privately investing in the first place. This system in no way relies on taking money from the already rich as you would suggest. Elon Musk could keep the hundreds of billions he already has, he just wouldn't be making hundreds of billions anymore. I also do not believe that the government should take ownership of his companies. He would retain full control over said companies, but the government would have control over the massive funds for those companies. My concept is effectively to leave as many parts of the economy intact as possible while reducing everyone to a reasonable fixed salary and using the excess money that they would have been making to improve government services while lowering taxes at the same time.

“CEOs are getting paid more because of their leverage over corporate boards, not because of their skills or contributions they make to their firms,” the EPI report stated. “Exorbitant CEO pay has contributed to rising inequality in recent decades as it has likely pulled up the pay of other top earners—concentrating earnings at the top and leaving fewer gains for ordinary workers.

Once again, there is a substitute for Musk.

but we don't have to give them quite so much bread that could be given to the other geese.

Professors are not paid commission. Professional investors are. If professional investors are paid only a base salary, they won’t be putting in any extra hours away from family they otherwise would (which is good) and achieving the better results those efforts would enable. What’s worse, there wouldn’t be many good investments at all under your system. So, you would get mediocre investors dealing in mediocre investments.

You made a claim about the stock market, and I asked you about your claim to see if you have any idea what you are talking about. Your non-answer actually is an answer to that.

The bolded involves contradictory claims. It’s as if you are saying, “No, the government is not taking ownership of your lemonade stand, you just can’t continue to profit from it, and only the government can by shares of its stock.” Your idea lacks coherence and understanding of how businesses are owned and financed.