In Defense Of Billionaires

You know me:  I see a meme like this, I have to quibble.

Sure, it seems plain enough.  There’s people out there who own more money than a thousand families could use in a lifetime, and at the same time there are kids who can’t buy school lunch, homeless veterans on the streets, and did I mention my underwater mortgage and student loans?  The government’s in debt up to its eyeballs, Social Security is going broke, and who’s gonna pay for it?  Not the billionaires.

All of which is fair enough, so far as it goes.  Thing is, though, it doesn’t actually go all that far.

The problem here is one of scale.  We can picture a thousand dollars easily; we can envision a million or two or five.  But the mind starts to boggle after that.  By the time we get to billions it’s beyond us, and economies deal in trillions.  Money in that amount behaves differently; it has mass, inertia, power, and something very like gravity.  Which is why economics is a science, and a national budget bears little relationship to balancing a checkbook.

To put this in scale:  If we were to confiscate the assets of all America’s billionaires and apply them to the national debt, we’d still be $12 trillion in the hole — and that wouldn’t touch state and personal debts, which total another $50 trillion.  (Incidentally, we’d also cause an economic collapse that would make Mad Max look cheerfully optimistic.  Economies like small changes.  Big changes cause crashes.)

This is because billionaires in general don’t have piles of cash lying around. There does exist an idle class that does; they buy yachts and tax-free municipal bonds and that third place in St. Tropez. Generally, these people aren’t billionaires; they’re the idle rich, generally possessed of a few tens of millions.  From an economic standpoint, they’re mayflies; they have small fortunes, and they squander them.  The money stays in circulation and their great-grandchildren will work at Taco Bell (which by then will have won the great Franchise Wars).

But billionaires are different.  Forbes makes an annual list, which numbers a bit over two thousand at the moment. Of them, about half have fortunes tied up in controlling interests of active businesses. The Mars siblings, for example, run the Mars candy company.  Bezos is Amazon; Musk is Tesla and SpaceX; the Waltons are WalMart.  If any of these dumped their shares on the market, the market would be able to absorb it; if a dozen did so at once, there would be tremendous instability.  Why?  Because these are not personal fortunes we’re talking about.  They’re businesses.  Bankrupt Bezos and Amazon collapses — and, incidentally, all of your Kindle eBooks go away because you don’t really own them.

Don’t get me wrong: I love the idea of penalizing the rich for hoarding wealth.  We should tax their land, their mansions, their private jets, their art collections, their obscenely expensive jewelry.  Double excise* tax should be assessed on couture items — thousand dollar shoes, ten thousand dollar suits, hundred thousand dollar gowns, and so on.  Lamborghinis and private helicopters should merit a special levy.  This is conspicuous consumption; it’s spending money for the sake of being seen to spend money.  If they want to, let them; we’ll help.

Likewise, there should be a special place in Hell (and the tax code) for ultra-wealthy people who don’t produce but only speculate, who profit from massive stock or bond manipulations, and who make billions juggling assets.  A person who makes a fortune cornering the global rice market does so by robbing the three trillion people that live on rice, and that sort of thing isn’t at all right.  Speculation within limits; fair profit is fine — but beyond a certain point, we should tax the hell out of it and apply the proceeds to the deficit.

But for people who own factories and build widgets, for those who provide us with cars, oil, cell phones, and GPS satellites… if you don’t like them, perhaps you might consider not buying their stuff.

Stop buying iPhones and shopping at WalMart or Amazon.  Kylie Jenner is now a billionaire thanks to her cosmetics lines; stop wasting money on makeup.  Don’t keep up with the Kardashians; don’t stream from paid sites.  Shop local, at small businesses; say goodbye to every chain and mall and 7-11.  Whatever you do, don’t buy gasoline.

(It’s harder than it sounds.  This is mainly because local businesses are less efficient than faceless corporations, so it costs more and is less convenient.  But if you don’t eat at the mom-and-pop diner and shop at the small-town grocery, you’ve only yourself to blame when they inevitably vanish.)

(Oh, and this website is now your only news source; you’d better contribute.)

Or you can make your peace with living in a corporate-run world while still aiming at fiscal responsibility.  Shop local whenever you can; tip your Uber driver and the barista at Peet’s Coffee — tip them in cash or their boss might get a cut, and the credit card company certainly will.  You’ll have to carry some actual dollar bills; suffer in silence.

Then, once you’re over your angst, you can fight the proper fight.  Being a billionaire isn’t evil; using your billions to buy senators and presidents is.  The only solution is to vote for candidates who pledge to reform campaign finance — and keep after them if they win; send letters, emails, telegrams; call them on the phone once a month.  Once that battle is won, we’ll be able to move forward against a very few of the other abuses; until it is, nothing you do will make even the slightest difference in the world.

* Excise tax rather than sales tax.  I’ve been reminded that a sales tax merely attacks domestic producers of luxury goods rather than farming the wealthy and thus is counterproductive.

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