Well, most of Bill Gates’ money is still tied up in MSFT stock, so to say it isn’t invested is simply wrong. Plus, he started Corbis in 1989, well after he became one of those billionaires, so you picked a really bad example.
The idea that billionaires just sit on their money and don’t invest it is ludicrous. Unless you got a cite for that…?
Actually, that’s a pretty good article to read carefully. As usual the NYT is full of shit. The title says it’s about people who lost their fortunes but somehow they weren’t able to find a single example of it. Incredibly shoddy journalism. If they had just wandered into one bar in my neighborhood after midnight they could have found lots of former millionaires and billionaires 
.
No cite but you’ve completely missed my point. I’m not saying billionaires don’t invest their money - I’m saying they rarely risk their money. Microsoft was the risk back in 1987. But in 2007 it’s an institution. It’s a safe stable investment that isn’t going to rock the economy. (And Corbis is the same.) The future of computer development isn’t going to come from Microsoft; it’s going to come from the unknown company that will someday knock Microsoft down and replace it. And Bill Gates isn’t looking to invest in that company.
You say this as if it’s a bad thing. All the segments of the population are doing better, from the poorest to the richest. I’m not a jealous guy, I’m glad the rich are richer. Just since reading your post, I already came up with two ideas to offer services to the superrich to help them spend some of that money.
As for the stagnation, cite please? AFAIK the stock market is up which means pensions for all sorts of workers are up, home ownership is up - It recently passed 50% for African Americans, weekly take home pay is up, employment is way up. Please tell me about this stagnation you’ve discovered.
And I don’t want to read too much into this since I don’t know you or any of the posters personally, but it does seem odd to bring up the election in the OP. Sounds like you’re hoping the economy will suck - i.e. millions of Americans will suffer - so the Dems can do better next time around. Just as Dems seem to be hoping the Islamists win for the same reason. Cite: Recent comments by Sen Clyburn.
Last I checked, 80% of “the wealthy” were self-made, from middle-class or lower backgrounds. I would personally bet that 50 or 100 years ago, inherited positions were more frequent.
Exactly. The rich who made the money are usually not total idiots - those who make money by accident of skill or birth may not. But they risked very little to get there.
There are exceptions - Bob Hope owned most of Southern California, it seems. He invested well.
There are limits to how long trusts last, I discovered when we set up ours.
Well, say the conservatives, better the money goes to those entrepreneurial drug dealers and hookers than to the big, bad gummint.
Take a look at the cite in my post 15. Median incomes are down, if that isn’t stagnation, I don’t know what is. Most people don’t have a lot of stock, and lots at the bottom don’t have 401Ks.
We’ll see how home ownership looks after we’re through with this wave of foreclosures. But the rich are richer, I have to give you that.
Cite back atcha. What do you base your claim that all segments of the population are doing better on? Voyager’s already pointed out the evidence that this isn’t true.
And I don’t think any Dems are hoping the economy will crash so they can get elected (or to raise the other claim I’ve heard made - I don’t think any Dems are hoping we lose in Iraq so they’ll get elected). I also don’t think the Pubs are hoping that there will be a major terrorist attack so they’ll get elected. But I think both the Dems and the Pubs have a legitimate point in saying that certain problems already exist and that their platform is better able to handle those problems.
Totally bass-ackwards. You can have amazing new innovations every day. You can use capital to load all those innovative shiny new product onto the shelves of lots of shiny new stores.
But if people can’t afford to purchase, or if they aren’t willing to invest their money on these items they become practically worthless. The goods are sold off at pennies to the dollars and both factories and stores close their doors. The innovators are then out of work. Let’s see those captains of industry drive the economy without us folks. Capitalism is driven by demand, not by supply. Supply is mostly a modifier. Trying to drive an economy by supply is simply pushing a string. In fact, wasn’t that what communism tried doing?
Create demand by giving 90% of the country more spending money, more opportunities for savings. Bring the wages up of the middle class and the economy takes off. Just raising the current tax rates enjoyed by capitol gains, about 15%, to about the 30% wage earners pay and then give wage earners that 15% rate every week, and guess what?
You’ll see more innovation. You’ll see more production. It will even move a few more people up into the upper class than we now see if the middle class have significantly more money to spend. Raise the minimum wage to a living wage so that it pushes more wages up, allow unions to organize without penalty. Clamp down on usurious credit rates by setting some ceilings by law to free up capital. Pay higher interest on savings. Like a person’s circulatory system, if money isn’t moving throughout the entire system at a steady rate, you’re in trouble.
And even at 15% those higher wages will still be providing greater tax revenues to boot.
Oh, and the 1% that pay 37% of the tax revenues? They are obviously earning waaaaayyy more than 37% more than the rest of us. Considering some of their tax rates are 17% ( like Warren Buffet) or less (sometimes none as Haliburton has in the past), if they paid as much as the rest of us they’d provide double what they do now. So it’s not like they’re doing us some great favor at 37%, ya know?
As Limbaugh would say, we are just jealous of the rich and their success after all they are the ones that make the country work. I am sure the top 1% in Guatemala pay most of the taxes as well. This just proves the point, if the rich pay most of the taxes it is because they own most of the assets and have most of the income in an ever increasing rate.
The sad truth is the middle class is slowing being eroded away and to point out that fact is to be accused of class warfare.
It is simply maddening that socialists cannot (or refuse to, whichever is the case) understand this. The whole American economic model is about MAKING money. Money is made with other money. Making money and printing currency is not the same thing.
And I’m saying I don’t believe you. So, let’s see something to back up that claim.
Every stock has risk attached to it. But I’d like to see your evidence that Corbis was a “safe” investment when Gates founded it.
That’s a distinct possibility, although not certain.
How do you know that?
You are right…he’s probably not looking to invest in that company. He’s looking to BUY that company. Thats Microsofts standard model. When they want a new technology that a small company has to offer, or when the want to market to something that they don’t do well in house they usually look at purchasing a small company who has the capability they want and integrating them into their business.
-XT
I’m not sure if it is still happening, but 10 years ago a lot of big companies had VC funds investing in smaller companies. It was pretty much a complete bust for everyone, since they were no better at picking winners (and often worse) than others. Drug companies work these days by buying smaller companies that have created a new and innovative drug. MSFT mostly works not by buying a company but by reproducing an innovation and then deploying it through Windows. For examples, we have browsers, we have disk compression, we have music players, and now we have spyware removers and firewalls.
For this very reason it’s not necessarily better to tax-advantage investment versus salary. If you tax-advantage it too much you will have too much capital flowing into crappy businesses because of the tax advantages, resulting in wasted capital.
It’s the same effect as the blow-up in housing prices partially caused by the laxity in lending causing lots of money pumped into housing. When the party’s over, the resulting repossessions and resales will have a net drag on the economy since all that reselling and rebuying isn’t really producing anything.
Similarly, all those dotcoms didnt have a useful product as compared to the tons of hours and materials invested in them, which was partially caused by the tax-advantaged status of capital gains.
OTOH, if you believe we have too little investment, tax advantages will increase it, but the default position should be that the free market will take care of it without tweaking the tax code to encourage investment versus consumption or saving.
I heard a story (possibly apocryphal) about a Ford exec who smugly gave a union leader a tour of the plant’s new automated equipment. Gesturing at the machines, the exec said, “How are you going to organize them?” The labor leader replied, “How are you going to sell them Fords?”
Right. One of the dumber economic moves I ever saw was cutting taxes on the wealthy to encourage investment in 2001, when the problem was too much capacity and not enough consumption. The impact of everyone finally figuring out that the dot bombs didn’t have a good business model wen far beyond them. They all ordered tons of equipment, which got cancelled. Equipment manufacturers, seeing this wonderful trend, over built and over ordered from their contract manufacturers. The CMs ate tons of inventory, and Cisco ate over a billion bucks worth. Then, because of all the equipment sold by dead dot coms, there was this massive market in used equipment that further depressed sales. I was in the middle of it, I know.
If that tax cut money had been placed in the hands of the general population, they would have bought stuff and used up some of this spare inventory, and we would have recovered much faster then we did. The market would have gone up faster, and those with big positions would have had enough to invest when investment was required.
It’s always easier to spend someone else’s money.
Cite: My ex-wife.
FUZZY MATH! FUZZY MATH! There you go with that FUZZY MATH again. Everyone, BG uses fuzzy math. Vote for me!
I thought they got rich by not writing a lot of checks 