When Was the Last Time a Fabulously Wealthy Person Actually ‘Hurt’ You Directly?
This could perhaps be the most preposterous presentation of ‘income inequality’ in American ever concocted.
If you can’t watch the whole thing, just watch the last minute before reading the rest of this screed. It sets the stage for what you are about to read.
Granted, when the charts are put together like this, the visual presentation of the ‘rich’ versus the ‘poor’ is shocking to say the least. It brings back the images of Emperors eating cake while their wives and mistresses are sarcastically saying ‘Let them eat cake!’ to the hungry hordes outside the palace.
It is good ‘politics’. It is terrible economics.
Anything that can be used to incite and excite political passions can and will be used to advance the views of any candidate or political movement in America or any other place on Planet Earth. We actually don’t mind the clever use of facts and figures, as long as they are true and verifiable.
These numbers in this chart are probably true and verifiable. The income disparity has widened over the past 20 years in America as corporate chieftains have been able to exercise stock options and warrants in rapidly-growing internet/software companies whose success gets rewarded for their innovations.
But so what? Those are the practical implications of anyone succeeding wildly in America. Isn’t that the sort of freedom our ancestors left the oppression in Europe to pursue?
Here’s our question for the day:
‘When was the last time that a very wealthy person ‘mugged’ you in any sort of manner and ‘took’ something from you?’
Chances are you have benefited from the generosity and charity of very wealthy individuals in your daily life and you may not even realize it.
Let’s take this in order:
1: Do ‘rich’ people take money ‘out’ of the pockets of their workers?
No. In fact, they ‘put’ money into the pockets of their workers each and every time they pay their salary or wages every week or every other week. In addition, they pay for a lot of the benefits each worker enjoys such as health care insurance. Try buying health insurance as an individual on the open market; you soon will realize what an enormous ‘gift’ you are being given by your employer and the ‘rich’ people you work for each time you get medical attention.
2: Do ‘rich’ people win some sort of ‘win-lose’ proposition vis-a-vis their workers when they get paid high salaries?
No. If they don’t pay themselves those wages, they are not going to pay their workers more money if it is far higher than the prevailing wage rates of their competition in the area or in their industry. Competitive wage rates set the wages paid to any worker in any particular company, not the amount of money a CEO or owner takes out of the business in a particular year.
3: What do ‘rich’ people need to take home $1M or more in salary for anyway? They can’t eat it, can they?
No, they can’t eat their money, that is true. But they can afford to pay for higher-priced food such as caviar that keeps the worker in the caviar business employed along with the importers, the distributors and the retailers who sell high-priced food to rich people.
4: What do ‘rich’ people do with all the money they don’t spend on the basics of food, clothing, shelter and transportation anyway? Why can’t they give it all away to their workers so at least their workers can live better lives?
‘Rich’ people who don’t blow their fortunes away like professional athletes or Mike Tyson typically can only do 1 of 2 things with their money: Keep it in a bank or other financial institution or invest it in stocks, bonds or direct investments in new businesses. They don’t keep it under their bed mattress you know.And even if they do ‘blow’ their fortunes away like Mike Tyson did with over $150 Million in career boxing earnings in the ring, they STILL are helping other people maintain a livelihood and make money to support their families. Mike Tyson buying a bunch of $10M mansions that he didn’t need employed hundreds of carpenters, stone masons, architects and home decorators during the time of construction and probably hundreds of more people later to take care of the yard and cook his food.
Even when ‘rich’ people blow their fortunes, they are still contributing to the economic benefit of people in the middle-and-lower income classes.
5: What happens at the end of their lives when ‘rich’ people die? Shouldn’t they just give it all back to the workers who helped make them rich and improve their lot in life?
Many times, rich people give their money in charitable contributions to help build and maintain things from which we all derive significant benefits.Ever heard of ‘Duke University’ and the ‘Duke University Medical Center’? That ‘dastardly’ James ‘Buck’ Duke who held a monopoly on the cigarette industry at the turn of the 19th century into the 20th and also started a small energy company you may have heard about, Duke Power and then Duke Energy, gave Trinity College of Trinity, NC $10 million to come to Durham and change their name to ‘Duke University’.
They came a’runnin’.
Universities and medical centers such as these fine institutions don’t sprout up out of the ground like some tulips from Holland we hope you do realize. The Duke family gave away much of their accumulated wealth to help build Duke University and the medical center. Hundreds of thousands of North Carolinians have no doubt been directly healed, cured or saved from the ground-breaking medical techniques at DUMC or know someone who has been cured by those doctors and research scientists there.
You want to get rid of that too? Some suggest we should tax the heck out of wealthy people’s estates like up to 90%…and then what? Give it to the federal government to fritter away like so much of the other federal taxpayer dollar gets frittered away each year?
If you taxed Bill Gates’ entire fortune of $35B at 100% and gave it to the US Treasury (instead of letting him set up the Bill Gates Charitable Foundations that have done so much good already and he is nowhere close to retiring or dying as far as we can tell), that would fund the federal government for 3.45 days…and then be gone forever. It would probably wind up funding research on blind albino squirrels or any number of ridiculous and useless projects we have seen funded in the past on an annual basis, sadly.
Nope. It seems like to us that the people who should be making the decisions to take money out of their own businesses and enterprises are the people who own it or who are on the Board of Directors that set executive compensation for the people the company hires.
Now, that is not to say that we think someone who runs their company into the ground or who crawls to Wall Street for a bailout after they mismanaged their business so that the whole economic system almost crumbled in 2008 should not be held accountable for their performance. We think that the TARP bailout of Wall Street and Detroit was a true ‘mugging’ of the first order to every US taxpayer. They made business decisions that led to their economic collapse and demise only to have us all serve as the trampoline on which they could bounce back into their high-paying, high-wage jobs without ever having to declare bankruptcy and start all over again from scratch.
But for the most part, paying CEOs and labor unions are private decisions made by private businesspeople in the private world of private sector enterprise. None of those are decisions that can or should be made by anyone in the political process. Unless, of course, a politician wants to leave office and set up his/her own corporation and get paid ‘only’ $100,000 each year with no stock options or warrants and share the wealth with their co-workers just to show the rest of us ‘how it should be done!’
We have yet to see anyone go through all the turmoil, tears and struggles of starting a business, stare bankruptcy in the face more than a few times and work and struggle and persevere and not want to take the lion’s share of the profits from the business if it ever becomes successful. It is just human nature to want to benefit from your own hard work and diligence.
We all benefit from a free society where some people just happen to have the talent and ambition to be more ‘successful’, in a financial way at least, than the rest of us. Without them and their drive and ingenuity, the rest of us would be unemployed or under-employed; we would not have these great universities and hospitals to use and 42% of the income tax now paid by the top 1% would not be paid.
And then how would your favorite social welfare system be funded?
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