The world’s fascination with Thomas Piketty and his book Capital in the Twenty-First Century is not abating. In the Bloomberg TV video today, Piketty Says FT Made a Fool of Itself Over His Book (video embedded below), we see that the “analysis” by the FT and Piketty’s aggressive response keeps this story cycle spinning and book sales moving along briskly. This is probably the most popular economics book in generations and perhaps the most popular book of any genre now, according to the Bloomberg Anchor. As they say in Hollywood, this story has legs.
Where do I stand on the Piketty debate? I agree with this assessment by Peter Schiff: “There can be little doubt that Thomas Piketty’s new book, Capital in the 21st Century, has struck a nerve globally. What is surprising, however, is that the absurd ideas contained in the book could captivate so many supposedly intelligent people.” If you want a thorough analysis, read Peter’s excellent article in Advisor Perspectives: Piketty’s Envy Problem.
Also of note, from David Hay, Chief Investment Officer at Evergreen Capital Management in Bellevue, WA:
“As indicated by the runaway success of Mr. Piketty’s book, there is intense interest in the wealth tax issue among the intelligentsia. Those of a more practical bent, who realize the growth-killing impact of his proposed confiscatory tax rates, especially on income, might want to start offering alternatives. Devoid of a more pragmatic solution, the Pikettys of the world may capture the minds of the planet’s politicians and the hearts of their voters.”
We are healthy because we have the world’s broadest and deepest capital structure. It is a rich resource and expansive platform that might just provide the seed capital for your next great business idea. Would that capital have been available if not for another’s success? Tax it, take it and redistribute to whom? Who decides? The government?
Personally, I believe on the other side of this debt, pension and entitlement mess is a move from public sector to private sector dominance. Excessive debt and unmanageable entitlements lead to tax confiscation and expanded regulation. Perhaps Piketty is the cover story that signals the top of this overly dominant public sector cycle. – Steve Blumenthal