Returns on capital should not be cut
At the same time, the hot new book in economics — Thomas Piketty’s Capital in the Twenty-First Century — argues that we need large wealth taxes to offset the tendency of investors to do better than workers. At least one of these people is wrong, and it’s probably Piketty.
Roose’s main argument is that many savers are subsidising unprofitable businesses, benefiting consumers and workers. What’s more, savers will never be able to recoup their investments. As Roose says: When these venture-backed price wars happen in dozens of high-end service sectors all at once, you have a strange cultural phenomenon in which Main Street dollars are being used to finance the lifestyles of cosmopolitan yuppies.
