This weekly roundup thread is intended for all culture war posts. 'Culture war' is vaguely defined, but it basically means controversial issues that fall along set tribal lines. Arguments over culture war issues generate a lot of heat and little light, and few deeply entrenched people ever change their minds. This thread is for voicing opinions and analyzing the state of the discussion while trying to optimize for light over heat.
Optimistically, we think that engaging with people you disagree with is worth your time, and so is being nice! Pessimistically, there are many dynamics that can lead discussions on Culture War topics to become unproductive. There's a human tendency to divide along tribal lines, praising your ingroup and vilifying your outgroup - and if you think you find it easy to criticize your ingroup, then it may be that your outgroup is not who you think it is. Extremists with opposing positions can feed off each other, highlighting each other's worst points to justify their own angry rhetoric, which becomes in turn a new example of bad behavior for the other side to highlight.
We would like to avoid these negative dynamics. Accordingly, we ask that you do not use this thread for waging the Culture War. Examples of waging the Culture War:
-
Shaming.
-
Attempting to 'build consensus' or enforce ideological conformity.
-
Making sweeping generalizations to vilify a group you dislike.
-
Recruiting for a cause.
-
Posting links that could be summarized as 'Boo outgroup!' Basically, if your content is 'Can you believe what Those People did this week?' then you should either refrain from posting, or do some very patient work to contextualize and/or steel-man the relevant viewpoint.
In general, you should argue to understand, not to win. This thread is not territory to be claimed by one group or another; indeed, the aim is to have many different viewpoints represented here. Thus, we also ask that you follow some guidelines:
-
Speak plainly. Avoid sarcasm and mockery. When disagreeing with someone, state your objections explicitly.
-
Be as precise and charitable as you can. Don't paraphrase unflatteringly.
-
Don't imply that someone said something they did not say, even if you think it follows from what they said.
-
Write like everyone is reading and you want them to be included in the discussion.
On an ad hoc basis, the mods will try to compile a list of the best posts/comments from the previous week, posted in Quality Contribution threads and archived at /r/TheThread. You may nominate a comment for this list by clicking on 'report' at the bottom of the post and typing 'Actually a quality contribution' as the report reason.
Jump in the discussion.
No email address required.
Notes -
Finally we're seeing the extent of the damage of the Kanye controversy
In the span of a month, Kanye West has destroyed his empire
yup..YeezyGap.com redirects to gap.com
What I don't understand is, how is his wealth being calculated here? Wouldn't Kanye's wealth be a roughly monotonically increasing function , that being his income from his endorsement deals? Losing said deals would not mean he has to forfeit accumulated wealth, just that he stops making any new wealth? So either he was never worth $2 billion or this decline is somehow based on some extrapolation?
From the Forbes link, it looks like an extrapolation : https://www.forbes.com/profile/kanye-west/?sh=515edd0c56f1
That seems misleading to say someone is worth something but it's not actually realized
To add, it shows how the mere accusation of racism or antisemitism is the left's superpower. It forces the accused to go on the defense and presumes some guilt. Any nuance or misunderstanding on the accused goes out the window. You can destroy someone's reputation this way even if it was a mistake. As popular as anti-woke sentiment is on twitter ,like Rogan and Musk, it does not matter if the people who hold the levers of power are still, by in large, woke , and and you have to literally be a self-made millionaire to survive said accusations without being completely destroyed career-wise or reputationally. Someone can argue "what Kanye said was really egregious" but people have been cancelled, banned for less and it does not change the automatic presumption of guilt.
This is how wealth is always reported. And yes, it is misleading--Jeff Bezos is "worth" over $100 billion on paper, but if he were to try to cash that out all at once, there's no way he'd get $100 billion out of it. The price of his stock would plummet faster than he could sell it, never mind finding $100 billion in cash buyers. It seems safe to assume that Amazon stock is somewhat more robust in valuation than Kanye's endorsement deal with Adidas, but the basic principle is the same.
In fact much of Bezos' worth is, in the terminology of the IRS, "unrealized gains." Capital gains are "realized" (and thus, taxed) only during certain events, usually sales. If I sign a contract for $1 billion to endorse Adidas shoes for the next ten years, I can walk into a bank with that contract and take out loans against that deal. If Adidas backs out, well, I'm gonna default on those loans, so the bank might be hesitant to loan too much money on that promise, but they would definitely loan some. We almost always evaluate wealthy people's worth based not only on cash-on-hand, but on a combination of liabilities and assets. A promise from Adidas to pay $1 billion over ten years is an asset, even if it is not as stable an asset as a mansion or a yacht.
This point is often stated and usually overstated. The only ways that a sale from Jeff Bezos would damage Amazon's valuation are if it persuades the market that either (1) Jeff Bezos has private information that causes him to be pessimistic about Amazon's future and that he is selling for that reason, or (2) Jeff Bezos's ongoing personal efforts are necessary to Amazon's success, and his sale indicates an intent to reduce the level of effort.
It's odd to speak of share of Amazon stock as having any meaningful inelasticity in the demand curve over the course of even a few weeks, such that dumping shares would overwhelm the population of willing buyers and cause the price to drop purely as a matter of supply and demand. It's like asking how many $100 bills you'd have to sell for $50 each before the value of the $100 bill dropped below $50. The demand schedule for $100 bills is effectively infinite at $99, and effectively zero at $101. Likewise Amazon's shares around the expected net present value of its future earnings; the analogy isn't perfect (the value of a share of Amazon isn't as objective as the value of a $100 bill, and it would take probably a few days after a shock for more smart money to do the analysis and come to a view of its value), but it's closer than an analogy to supply and demand curves with nice straight lines.
Apologies for chasing a nitpicky point; it's a pet peeve of mine.
More options
Context Copy link
Not the same thing. The Adidas's deal was effectively an IOU that could be cancelled at Adidas's discretion. Amazon stock is an asset that legally belongs to Bezos that can be sold on an exchange.
Not quite so. He could sell it to a private investor, like a bank , without the shares having to hit the exchange. This is how Elon negotiated the Twitter buyout. Also, Amazon trades considerable volume daily , so selling even on the market would not be too hard. Third, Bezos could also hedge the position with options.
Well, yes, shares of Amazon are not the same thing as a partnership contract. But shares of Amazon are also not the same thing as a house, or a piece of art, or a bitcoin. One thing they all have in common, though, is that they (can) get counted as assets when calculating wealth. Another thing they have in common is that their value can disappear suddenly and without much warning under the right circumstances. Those circumstances differ by the kind of wealth under consideration, but in general that's not the kind of thing people bother to factor in when calculating present wealth.
More options
Context Copy link
More options
Context Copy link
And this is why wealthy people who live off their investments don't pay taxes. Let's say I own $100 million in Berkshire Hathaway stock and I want to spend $4 million per year. I could sell $4 million in stock and then pay capital gain taxes. Or, I could borrow $4 million against the stock and pay no taxes. The interest on the margin debt is even deductible.
Note: This worked a lot better when margin interest was as low as 1%.
More options
Context Copy link
Where exactly is the boundary on assets and liabilities that go into net worth? For instance, the sum total of all my future labor is valuable, and events in the present can increase or decrease that value, but it generally wouldn't be included in my net worth (except under the utilitarian accounting that some like to use in these circles). Is the distinction based solely on risk? Are valid sources of personal wealth just enumerated in a list somewhere? Is there some other metric that everyone uses?
Wherever you want! Or, more realistically, wherever the government agency you're dealing with wants to put it.
When you apply for a home loan in the United States, it is common for lenders to ask for proof of salary in the form of paystubs or a contract. I doubt they think of it in terms of "net worth" (but I don't know, maybe they do?) but that is one way the anticipated sum of your future labor is sometimes used to gauge your worth. Actually there are some theorists out there doing research two steps removed from the current system of income tax. First remove: they think we should tax wealth additionally or instead. Second remove: they think that one form of wealth is natural talent, so we should find a way to tax e.g. naturally smart people to deprive them of the unequal advantage they have over others. While I am skeptical the idea will ever get traction outside the ivory towers of academia, there are definitely people out there who want to think about your net worth in terms of all your assets, including your anticipated labor and inherent talents.
There are many such lists. Here is one oriented toward business. Here is a list that explicitly excludes labor. Medicaid has its own list. Different states have different approaches to, e.g., the treatment of a university degree as a dividable asset in divorce proceedings.
There is, in other words, no Platonic ideal of "asset" which gets applied in every case, or even most cases. Whether you count someone's assets in a liberal or constrained way usually depends on what it is you're trying to accomplish. For example, I once heard of a case where the IRS valued a certain coin collection at "market value" for the purpose of measuring an estate's worth, but then seizing the coins and crediting only their face value against the defendant's tax bill. There is no such thing as objective valuation. There is only majority hashpower in the blockchain of life.
More options
Context Copy link
Generally accepted accounting principals or GAAP, lays out the methods that businesses use.
More options
Context Copy link
More options
Context Copy link
Adidas contracts are probably much more stable than yacht values in typical, non-"shutting it down with much oy vey-ing" circumstances. The prices those things are bought and sold at make tumblr look like a sensible investment.
But that's admittedly not much of a counterpoint to the "so isn't wealth just whatever the bankers say it is?" position.
More options
Context Copy link
More options
Context Copy link
More options
Context Copy link