How Did Things Get So Bad?

Background

The United States of America seems pretty fucked (from the standpoint of April 29th, 2025 [really, any point in 2025]).

• From February 13th, when President Trump announced "reciprocal" tariffs, eventually indicating on essentially the whole world.

• From March 15th, when 200 alleged 1. Venezualan, 2. Gang Members were sent to El Salvador (included legal residents and at least 75% non gang members).

• And to a lesser extent, since reporting on the current Secretary of Defense's sharing of attack plans in group chats on Signal (where group members included an 'The Atlantic' journalist, Hegseth's wife, brother and non military & non government friends).

Thesis

Rich people have too much of the money.

Explanation

There isn't often a reason to think about how there's a finite amount of money in the world. But there is. The theory here gets a bit complicated with M1, M2, M3 (see Money Supply Definition), but for all intents & purposes, at any point in time theres some specific fixed amount of money in the world.

The theory behind why capitalism is good is that (presumably rationale) people spend money, and individuals acting in a self-interested manner spend the least amount of money for the best stuff and services. This means the people that provide those best services and make those best goods would make the most profit (assuming they're also acting self interestedly and also assuming they need the money).

For this conversation, the most important hidden assumption here is that people started with some money to spend on the best services and goods. Famously, very few people had money during this event called the "Great Recession".

Here's a graph that most economists would say means everythings been fine, in fact good:

Unfortunately most economists are out of touch and from wealthy backgrounds 63% of economists have at least one parent with a graduate degree, compared to 16% of general population.

The reasons the ~60% increase in median wealth is bad is:

• Median Home prices have increased by ~450% over the same time period (1984-2025)
• Median college tuition has risen by at least 900%

For the economists out there, 450% and 900% are a lot, lot more than 60%.

How have normal people managed to continue affording houses and college? They really haven't. How have colleges and housing developers managed to stay in business? People taking out loans they can't afford (see "Great Recession" above, "Student Loan Crisis" currently on going).

Does this just mean that, relatively, everyone is poorer? No - just most people. The wealthiest are, like, really, really, really, really, really wealthier.

The top 1% has 50% more of all assets compared to 1989. The next 9% (the 90th-99th of top asset holders) have stayed the same, and the median (50%) and next 40% (50th to 90th top asset holders) have had their % of assets shrunk by 25%.

People have less money to spend on shit. When you have as much money as the top 1 & .01 percent, you literally run out of things to spend money on. So you park your money in investments, which make you more money (which explains why the rest of the population has relatively fewer assets).

Pretty quickly, businesses realize no one except these rich people have money to spend on anything, and so they stop making things that aren't specifically for the rich. Thats why infinity pools and luxury yachts have become things people talk about.

For more details:

• Robert Reich's "Wealth & Inequality" Course
• Scott Galloway's TED talk (If you want more ongoing content, I recommend https://profgmedia.com/podcasts-raging-moderates/)
• Gary Stevenson (Primarily U.K. focused, but knowledgeable on the U.S. and just as applicable -- also (probably because of age) the person I most agree with on sense of urgency (though Scott Galloway seems to understand the urgency, I don't think his actions always line up with this awareness). I also really recommend his book The Trading Game.