# Should we allow individuals to hold billions of dollars in their pockets? **URL:** \ **Category:** Great Debates\ **Created:** [January 29, 2019, 11:30am UTC](https://boards.straightdope.com/t/should-we-allow-individuals-to-hold-billions-of-dollars-in-their-pockets/828614 "2019-01-29T11:30:50Z")\ **Posts on this page:** 20\ **Page:** 7
**Author:** ![Slash1972](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/slash1972/32/6461_2.png) [@Slash1972](https://boards.straightdope.com/u/Slash1972)\ **Post date:** [January 30, 2019, 9:09pm UTC](https://boards.straightdope.com/t/should-we-allow-individuals-to-hold-billions-of-dollars-in-their-pockets/828614/121 "2019-01-30T21:09:37Z")
> [@HurricaneDitka](#): > > Given that she represents New York City, I think it’s a reasonable assumption that that’s the city she was referring to. I’m open to the possibility that various socialist states (Venezuela, in particular, comes to mind right now) have failed so badly that people might “work 80 hour weeks and can’t feed feed their kids”, but here in America? In New York City? C’mon man, virtually nobody starves to death in America, and certainly not any significant number of people working 80 hours a week can’t afford food. Perhaps. But that’s not what you said. But in any event, I would say that someone whose kids are on free lunch/breakfast at school are having problems feeding their kids. I would say that any parents and their kids at soup kitchens and/or homeless shelters are having problems feeding their kids. Or are you going to say NYC has no kids on a free lunch program, or at homeless shelters, or at soup kitchens? I mean, sure if you want to say “It’s no problem for a guy to have an eleventy billion dollar helipad, because we have soup kitchens to help out the poor folk” then sure, that’s on you. ---
**Author:** ![HurricaneDitka](https://avatars.discourse-cdn.com/v4/letter/h/96bed5/32.png) [@HurricaneDitka](https://boards.straightdope.com/u/HurricaneDitka)\ **Post date:** [January 30, 2019, 9:10pm UTC](https://boards.straightdope.com/t/should-we-allow-individuals-to-hold-billions-of-dollars-in-their-pockets/828614/122 "2019-01-30T21:10:57Z")
> [@Slash1972](#): > > … Or are you going to say NYC has no kids on a free lunch program, or at homeless shelters, or at soup kitchens? … No, I’m confident NYC has a shitload of kids on a free lunch program. I doubt many of the parents of those kids work 80 hours / week. ---
**Author:** ![Bone](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bone/32/407_2.png) [@Bone](https://boards.straightdope.com/u/Bone)\ **Post date:** [January 30, 2019, 9:19pm UTC](https://boards.straightdope.com/t/should-we-allow-individuals-to-hold-billions-of-dollars-in-their-pockets/828614/123 "2019-01-30T21:19:48Z")
> [@Cheesesteak](#): > > aaaaand, we have to waste yet another post to correct your reading comprehension, or correct your deliberate misinformation. This seems out of character for you so I’m going to make this a note. This could easily be construed as both an insult (reading comprehension) and an accusation of lying (deliberate misinformation). Both are not allowed in this forum. Don’t do this going forward. If you feel you must, the Pit is right around the corner. [/moderating] ---
**Author:** ![Ruken](https://avatars.discourse-cdn.com/v4/letter/r/f475e1/32.png) [@Ruken](https://boards.straightdope.com/u/Ruken)\ **Post date:** [January 30, 2019, 9:22pm UTC](https://boards.straightdope.com/t/should-we-allow-individuals-to-hold-billions-of-dollars-in-their-pockets/828614/124 "2019-01-30T21:22:37Z")
> [@wolfpup](#): > > I just want to address this “non-zero-sum” argument about the economy that seems to have come up here quite a lot in defense of billionaires. Of course the economy is not zero-sum. And of course a few rich innovators have contributed to it and to our general well-being (though many have not). And of course innovators and sensible risk-takers doing useful things deserve to be rewarded. If they become millionaires, more power to them, though they should be subject to responsible progressive taxation. > > But when a single person is able to amass $140 billion in personal wealth, that is a figure of such staggering magnitude – an amount much larger than the entire GDP of Hungary, Kuwait, and at least 132 other countries – that it should be seen as a red flag of a systemic national problem. That kind of money doesn’t come primarily from “growing the pie” or anything else; it comes from other people, and in Bezos’ case, a big part of it comes from all those other retailers that Amazon has put out of business and millions of their employees that it has put out of jobs. Besos’ pay is ~$82k. Amazon doesn’t pay dividends. Bezos became wealthy because other people wanted to pay a lot for AMZN shares. They weren’t paying him for them. He already owned them and the price went up. There was no major wealth transfer. And, as already mentioned, the US retail trade sector employed more people in the past year than it ever has. So that angle doesn’t hold water. ---
**Author:** ![Slash1972](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/slash1972/32/6461_2.png) [@Slash1972](https://boards.straightdope.com/u/Slash1972)\ **Post date:** [January 30, 2019, 9:24pm UTC](https://boards.straightdope.com/t/should-we-allow-individuals-to-hold-billions-of-dollars-in-their-pockets/828614/125 "2019-01-30T21:24:41Z")
> [@HurricaneDitka](#): > > No, I’m confident NYC has a shitload of kids on a free lunch program. I doubt many of the parents of those kids work 80 hours / week. Fair enough. I will acknowledge the lack of 80 hour a week-working parents, if you acknowledge that kids on a free lunch program shows that there are parents who cannot afford to feed their kids. ---
**Author:** ![HurricaneDitka](https://avatars.discourse-cdn.com/v4/letter/h/96bed5/32.png) [@HurricaneDitka](https://boards.straightdope.com/u/HurricaneDitka)\ **Post date:** [January 30, 2019, 9:26pm UTC](https://boards.straightdope.com/t/should-we-allow-individuals-to-hold-billions-of-dollars-in-their-pockets/828614/126 "2019-01-30T21:26:22Z")
> [@Slash1972](#): > > Fair enough. I will acknowledge the lack of 80 hour a week-working parents, if you acknowledge that kids on a free lunch program shows that there are parents who cannot afford to feed their kids. Agreed. ---
**Author:** ![Ruken](https://avatars.discourse-cdn.com/v4/letter/r/f475e1/32.png) [@Ruken](https://boards.straightdope.com/u/Ruken)\ **Post date:** [January 30, 2019, 9:31pm UTC](https://boards.straightdope.com/t/should-we-allow-individuals-to-hold-billions-of-dollars-in-their-pockets/828614/127 "2019-01-30T21:31:28Z")
> [@Slash1972](#): > > Fair enough. I will acknowledge the lack of 80 hour a week-working parents, if you acknowledge that kids on a free lunch program shows that there are parents who cannot afford to feed their kids. It’s the main reason I didn’t have kids when I wasn’t capable making much money. That doesn’t stop everyone, but that’s not the kids’ fault, so tax me (and Bezos). ---
**Author:** ![wolfpup](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/wolfpup/32/10618_2.png) [@wolfpup](https://boards.straightdope.com/u/wolfpup)\ **Post date:** [January 30, 2019, 10:15pm UTC](https://boards.straightdope.com/t/should-we-allow-individuals-to-hold-billions-of-dollars-in-their-pockets/828614/128 "2019-01-30T22:15:01Z")
> [@Ruken](#): > > Besos’ pay is ~$82k. What an astoundingly irrelevant factoid! Unless you’re telling us Bezos made his money by working at that salary for 1,707,317 years! > [@Ruken](#): > > Bezos became wealthy because other people wanted to pay a lot for AMZN shares. They weren’t paying him for them. He already owned them and the price went up. There was no major wealth transfer. So he somehow created $140 billion out of thin air? Nice trick! No, the money came from the valuation of Amazon, which in turn came from all the hundreds of billions being spent there by you and me, which in turn was money that wasn’t being spent somewhere else. None of which is intrinsically, in itself, a problem. The problem is the incredible concentration of wealth that was allowed to be amassed by a single individual to the benefit of almost no one, in a place that has one of the highest levels of economic inequality in the developed world. But I’m just repeating myself; I said it already in post #118. > [@Ruken](#): > > And, as already mentioned, the US retail trade sector employed more people in the past year than it ever has. So that angle doesn’t hold water. Look closer. After a big dip post-2008, retail sector employment improved only modestly, and considering the rate of economic growth and the rate of increase of other sectors (the BLS “company management” sector grew by about 20% since 2008), the retail sector was practically stagnant. All the more pathetic considering that strong performers like Walmart and even McDonald’s are part of this picture. In fact the alleged “increase” in retail employment over the past decade is so modest that Amazon employment alone accounts for almost all the difference, so the sarcastic quip “maybe they all work for Amazon now” is almost literally true. Obviously with a few very strong players in the retail sector and the relative stagnation of the sector overall, a great many of the smaller retailers are struggling or verging towards bankruptcy. Or are you really trying to deny that the retail sector is in serious trouble and undergoing major transformations, and that Amazon is a big part of their troubles? > [@HurricaneDitka](#): > > A C’mon man, virtually nobody starves to death in America, and certainly not any significant number of people working 80 hours a week can’t afford food. So in your view, everyone is doing just fine? Except, as I mentioned, the 43.1 million Americans living in poverty, including about 16.7 million children living in what are considered “food insecure” households. In 2013 UNICEF ranked the US as having the second highest relative child poverty rates in the developed world. The US also has one of the highest rates of income disparity in the developed world. The [USDA provides slightly different](https://hungerandhealth.feedingamerica.org/understand-food-insecurity/) but similar numbers: 40 million Americans are “food insecure”, including 12 million children, due to a lack of sufficient financial resources to provide “consistent access to enough food for an active, healthy life.” That’s about as basic as it gets. And don’t even get me started on the lack of health care. ---
**Author:** ![D\_Anconia](https://avatars.discourse-cdn.com/v4/letter/d/67e7ee/32.png) [@D\_Anconia](https://boards.straightdope.com/u/D_Anconia)\ **Post date:** [January 30, 2019, 10:32pm UTC](https://boards.straightdope.com/t/should-we-allow-individuals-to-hold-billions-of-dollars-in-their-pockets/828614/129 "2019-01-30T22:32:29Z")
> [@Budget\_Player\_Cadet](#): > > That… What? No, that’s not how this works. Taxes are not an expense. Cite please. > [@](#): > > Blatant fraud is also in one’s best interest. Tax avoidance and tax fraud are entirely different things. Did you know that? ---
**Author:** ![Budget\_Player\_Cadet](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/budget_player_cadet/32/205_2.png) [@Budget\_Player\_Cadet](https://boards.straightdope.com/u/Budget_Player_Cadet)\ **Post date:** [January 30, 2019, 10:54pm UTC](https://boards.straightdope.com/t/should-we-allow-individuals-to-hold-billions-of-dollars-in-their-pockets/828614/130 "2019-01-30T22:54:52Z")
> [@Bone](#): > > This seems out of character for you so I’m going to make this a note. This could easily be construed as both an insult (reading comprehension) and an accusation of lying (deliberate misinformation). Both are not allowed in this forum. Don’t do this going forward. If you feel you must, the Pit is right around the corner. > > [/moderating] It _does_ seem out of character. It may be worth investigating what, if anything, might have brought that on. Just sayin’. ---
**Author:** ![HurricaneDitka](https://avatars.discourse-cdn.com/v4/letter/h/96bed5/32.png) [@HurricaneDitka](https://boards.straightdope.com/u/HurricaneDitka)\ **Post date:** [January 30, 2019, 11:00pm UTC](https://boards.straightdope.com/t/should-we-allow-individuals-to-hold-billions-of-dollars-in-their-pockets/828614/131 "2019-01-30T23:00:22Z")
> [@wolfpup](#): > > … So in your view, everyone is doing just fine? Except, as I mentioned, the 43.1 million Americans living in poverty, including about 16.7 million children living in what are considered “food insecure” households. In 2013 UNICEF ranked the US as having the second highest relative child poverty rates in the developed world. The US also has one of the highest rates of income disparity in the developed world. > > The [USDA provides slightly different](https://hungerandhealth.feedingamerica.org/understand-food-insecurity/) but similar numbers: 40 million Americans are “food insecure”, including 12 million children, due to a lack of sufficient financial resources to provide “consistent access to enough food for an active, healthy life.” That’s about as basic as it gets. And don’t even get me started on the lack of health care. No. I readily concede, at least for purposes of this argument, that there are some people who “can’t feed their kids”. Likewise, I readily concede that there are some people who work 80 hours / week. Generally, those are two very separate groups of people though. The overlap, the “people who are working 80-hour weeks and can’t feed their kids”, is vanishingly small, at least here in America / NYC. We might as well be talking about what to feed our unicorns as what we’re going to do for this essentially-non-existent group of people. ---
**Author:** ![Ruken](https://avatars.discourse-cdn.com/v4/letter/r/f475e1/32.png) [@Ruken](https://boards.straightdope.com/u/Ruken)\ **Post date:** [January 30, 2019, 11:20pm UTC](https://boards.straightdope.com/t/should-we-allow-individuals-to-hold-billions-of-dollars-in-their-pockets/828614/132 "2019-01-30T23:20:21Z")
> [@wolfpup](#): > > What an astoundingly irrelevant factoid! Unless you’re telling us Bezos made his money by working at that salary for 1,707,317 years! It shows that Bezos’ wealth was not transferred from Amazon’s revenue. > [@wolfpup](#): > > So he somehow created $140 billion out of thin air? Nice trick! No, the money came from the valuation of Amazon, which in turn came from all the hundreds of billions being spent there by you and me, which in turn was money that wasn’t being spent somewhere else. It came from the same place that the 50 trillion increase in household and non-profit net worth came from since the last recession. The pie got bigger. A dollar increase in Amazon’s market cap is not required to correspond to a decrease in wealth or market cap elsewhere. The money you and I spend at Amazon for the most part goes right out the door to pay their bills and not into Bezos’ pocket. > [@wolfpup](#): > > Look closer. After a big dip post-2008, retail sector employment improved only modestly, and considering the rate of economic growth and the rate of increase of other sectors (the BLS “company management” sector grew by about 20% since 2008), the retail sector was practically stagnant. All the more pathetic considering that strong performers like Walmart and even McDonald’s are part of this picture. In fact the alleged “increase” in retail employment over the past decade is so modest that Amazon employment alone accounts for almost all the difference, so the sarcastic quip “maybe they all work for Amazon now” is almost literally true. Obviously with a few very strong players in the retail sector and the relative stagnation of the sector overall, a great many of the smaller retailers are struggling or verging towards bankruptcy. Or are you really trying to deny that the retail sector is in serious trouble and undergoing major transformations, and that Amazon is a big part of their troubles? So now you’ve moved the goal posts from actual jobs lost (“millions of their employees that it has put out of jobs”) to jobs that might have existed. We have more people employed in retail trades than ever before. Hell we have more people employed, period, than ever before. Might-have-beens and make-believe and good and fun but retail trade jobs as a share of total employment have been decreasing steadily for three decades. Before Amazon even existed and long before it realized they could sell something other than books. Because technology advancements and consumer preferences have brought along new and exciting things to do that simply didn’t exist or didn’t have the demand before, thus decreasing the share of some job categories even when their absolute numbers are increasing. ---
**Author:** ![XT](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/xt/32/456_2.png) [@XT](https://boards.straightdope.com/u/XT)\ **Post date:** [January 31, 2019, 12:59am UTC](https://boards.straightdope.com/t/should-we-allow-individuals-to-hold-billions-of-dollars-in-their-pockets/828614/133 "2019-01-31T00:59:13Z")
> [@Barack\_Obama](#): > > Should the gov allow a small % of the population to to concrete a large amount of wealth? I don’t mean businesses but rather individuals. Should a single person be allowed to be in control of so much wealth? I can think of a number of reasons why. It stagnates the rate that money is being spent if a small portion of the population holds most of the money while not spending or investing it. It also lets CEO, executives, and anyone of power to buy back their own stocks with the welfare the gov handed out to them with the intention they’ll expand or invest (seeing as that’s legal and all). So is it a net positive for us overall to allow billionaires to exist? The way I see it is, is that it’s unethical for there to be billionaires while there is still poverty in the US. With all the wealth we have, and all the complexities of taxation and subsidization which result in the prices of our milk for example to be fixated, why should we allow individuals to amass so much power as to hold billions of dollars while that money could be spent, or to feed people. Is there a good reason we should allow absolute capitalism and allow predatory tactics to push a small % of the population towards the top while everyone under them suffers and makes up the difference? I mean if Americans really hate even the mention of socialism so much maybe they should stop taxing the rich, deregulating businesses/workplaces, and see how much better off their lives will be right? Hm. Well, we are living in a time of unprecedented prosperity for the majority of humanity. Today, there are more humans who have gone from abject poverty to simply poverty (and up the line) than at any time in our entire history. Of course, there have been downsides to this…and maybe that’s what you are trying to address? Perhaps you want the huddled masses to stay huddled so as to, what? Lower their carbon footprint so that the elite rich can spew more? Something along those lines? I think there is a middle ground wrt your final sentence…the extremes are always so, well, extreme. But overall, I think what we are doing collectively as a species wrt ‘allowing’ rich folks to keep their money is overall working out pretty well, so we probably shouldn’t and really don’t need to do anything radical about that. Some adjustments would be good, but basically swiping all their wealth because reasons? Not so much. So, to answer the OP title: > [@](#): > > Should we allow individuals to hold billions of dollars in their pockets? Yeah. We should. It’s working out pretty well for us overall. Much better than in the past, and certainly much better than the attempts to collectivize the wealth for The People(tm…arr). Or, to put it in perspective, is it better to be China (which is the best example I know of to demonstrate all the worst aspects of capitalism welded to a totalitarian state) or Venezuela? Yeah, lots and lots of issues in China…and lots of them very, very bad. But it’s still managed to move more people out of poverty in the last decade than live in all of the EU so, net positive on that front at least. Venezuela…well, not really that great (despite the irony of China basically pouring billions in to try and prop them up. Can’t wait until that bill comes due). ---
**Author:** ![Absolute](https://avatars.discourse-cdn.com/v4/letter/a/b2d939/32.png) [@Absolute](https://boards.straightdope.com/u/Absolute)\ **Post date:** [January 31, 2019, 1:20am UTC](https://boards.straightdope.com/t/should-we-allow-individuals-to-hold-billions-of-dollars-in-their-pockets/828614/134 "2019-01-31T01:20:33Z")
> [@wolfpup](#): > > So he somehow created $140 billion out of thin air? Nice trick! No, the money came from the valuation of Amazon, which in turn came from all the hundreds of billions being spent there by you and me, which in turn was money that wasn’t being spent somewhere else. None of which is intrinsically, in itself, a problem. The problem is the incredible concentration of wealth that was allowed to be amassed by a single individual to the benefit of almost no one, in a place that has one of the highest levels of economic inequality in the developed world. But I’m just repeating myself; I said it already in post #118. You have a fundamental misunderstanding what Bezo’s wealth is. You seem to think he’s sitting on $140 billion in cash that he’s extracted from Amazon’s customers and redirected from his competitors - cash and resources that he’s sucked out of the economy and is selfishly hoarding for himself. This is not the case at all. His net worth of $140 billion is based on his ownership of 16% of Amazon, and Amazon has a stock market value of $850 billion. That valuation doesn’t mean that Amazon is sitting on $850 billion in cash either - in fact, Amazon’s total assets are only about $100 billion, and most of that is things that are actually serving a productive purpose - warehouses, equipment, inventory, etc. The remaining $750 billion represents the perceived value (to investors) of the fact that Amazon is a well-run, functioning business that can profitably and effectively compete, provide a valuable service to its customers, and is expected to continue doing so in the future. That $750 billion **literally was created out of thin air** - mostly by Jeff Bezos. It exists only in the heads of investors, and it changes day by day - if investors decided tomorrow they were willing to pay $3,200 per share of Amazon instead of $1,600 (say, because they’re much more optimistic about the economy), suddenly, **another** $850 billion would be **created out of thin air**. And instead, if they decide they’re only willing to pay $200 per share (say, because they’re concerned that a bunch of economically ignorant lunatics will come to power in the US and destroy the most productive economic system the world has ever seen), that $750 billion just vanished into thin air. So, about $16 billion of Bezo’s wealth comes from the actual assets of Amazon, and the remaining $123 billion comes from the value of Amazon as a business - literally, created from thin air. You suggested Bezos could feed 16.7 million children. Let’s think about how he might feed these children with these two different types of wealth. How can he feed children with the assets of Amazon? Amazon is productively using it’s assets (comprising $16 billion of Bezo’s wealth) - its computers, its warehouses, its delivery vans, its inventory. Obviously it would be incredibly short-sighted to liquidate (sell of) any of this - these assets are what make Amazon a functioning business in the first place. So let’s look at the $123 billion, the fraction of Bezo’s wealth that comes from the ephemeral business value of Amazon. Can a child eat business value? Of course not. It barely exists - it exists only in the head of the investors. It doesn’t represent cash, or assets, or food, or even a claim to these assets in the future. In a very real sense, this $123 billion exists only on paper. This is true not just for Bezos. Most of the wealth of the billionaires (and most millionaires) in the US is not in the form of cash, it’s in the form of ownership of productive businesses. And most of that value is just perception. Yes, in isolation, Bezos could sell some stock to other wealthy investors, and generate some cash to feed some kids. But what do you think would happen if you suddenly required every wealthy person in the US to sell 2% of their assets in order to fund this tax? Where to do you think the actual **cash** to buy these assets (and feed these children) will come from, if every wealthy person is scrambling to raise cash themselves to pay the tax? ---
**Author:** ![XT](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/xt/32/456_2.png) [@XT](https://boards.straightdope.com/u/XT)\ **Post date:** [January 31, 2019, 1:40am UTC](https://boards.straightdope.com/t/should-we-allow-individuals-to-hold-billions-of-dollars-in-their-pockets/828614/135 "2019-01-31T01:40:14Z")
> [@Absolute](#): > > You have a fundamental misunderstanding what Bezo’s wealth is. You seem to think he’s sitting on $140 billion in cash that he’s extracted from Amazon’s customers and redirected from his competitors - cash and resources that he’s sucked out of the economy and is selfishly hoarding for himself. > > This is not the case at all. His net worth of $140 billion is based on his ownership of 16% of Amazon, and Amazon has a stock market value of $850 billion. That valuation doesn’t mean that Amazon is sitting on $850 billion in cash either - in fact, Amazon’s total assets are only about $100 billion, and most of that is things that are actually serving a productive purpose - warehouses, equipment, inventory, etc. The remaining $750 billion represents the perceived value (to investors) of the fact that Amazon is a well-run, functioning business that can profitably and effectively compete, provide a valuable service to its customers, and is expected to continue doing so in the future. > > That $750 billion **literally was created out of thin air** - mostly by Jeff Bezos. It exists only in the heads of investors, and it changes day by day - if investors decided tomorrow they were willing to pay $3,200 per share of Amazon instead of $1,600 (say, because they’re much more optimistic about the economy), suddenly, **another** $850 billion would be **created out of thin air**. And instead, if they decide they’re only willing to pay $200 per share (say, because they’re concerned that a bunch of economically ignorant lunatics will come to power in the US and destroy the most productive economic system the world has ever seen), that $750 billion just vanished into thin air. > > So, about $16 billion of Bezo’s wealth comes from the actual assets of Amazon, and the remaining $123 billion comes from the value of Amazon as a business - literally, created from thin air. You suggested Bezos could feed 16.7 million children. Let’s think about how he might feed these children with these two different types of wealth. > > How can he feed children with the assets of Amazon? Amazon is productively using it’s assets (comprising $16 billion of Bezo’s wealth) - its computers, its warehouses, its delivery vans, its inventory. Obviously it would be incredibly short-sighted to liquidate (sell of) any of this - these assets are what make Amazon a functioning business in the first place. > > So let’s look at the $123 billion, the fraction of Bezo’s wealth that comes from the ephemeral business value of Amazon. Can a child eat business value? Of course not. It barely exists - it exists only in the head of the investors. It doesn’t represent cash, or assets, or food, or even a claim to these assets in the future. In a very real sense, this $123 billion exists only on paper. > > This is true not just for Bezos. Most of the wealth of the billionaires (and most millionaires) in the US is not in the form of cash, it’s in the form of ownership of productive businesses. And most of that value is just perception. > > Yes, in isolation, Bezos could sell some stock to other wealthy investors, and generate some cash to feed some kids. But what do you think would happen if you suddenly required every wealthy person in the US to sell 2% of their assets in order to fund this tax? Where to do you think the actual **cash** to buy these assets (and feed these children) will come from, if every wealthy person is scrambling to raise cash themselves to pay the tax? Very good post. ---
**Author:** ![dorvann](https://avatars.discourse-cdn.com/v4/letter/d/df705f/32.png) [@dorvann](https://boards.straightdope.com/u/dorvann)\ **Post date:** [January 31, 2019, 2:21am UTC](https://boards.straightdope.com/t/should-we-allow-individuals-to-hold-billions-of-dollars-in-their-pockets/828614/136 "2019-01-31T02:21:24Z")
> [@Absolute](#): > > You have a fundamental misunderstanding what Bezo’s wealth is. You seem to think he’s sitting on $140 billion in cash that he’s extracted from Amazon’s customers and redirected from his competitors - cash and resources that he’s sucked out of the economy and is selfishly hoarding for himself. > > This is not the case at all. His net worth of $140 billion is based on his ownership of 16% of Amazon, and Amazon has a stock market value of $850 billion. That valuation doesn’t mean that Amazon is sitting on $850 billion in cash either - in fact, Amazon’s total assets are only about $100 billion, and most of that is things that are actually serving a productive purpose - warehouses, equipment, inventory, etc. The remaining $750 billion represents the perceived value (to investors) of the fact that Amazon is a well-run, functioning business that can profitably and effectively compete, provide a valuable service to its customers, and is expected to continue doing so in the future. > > That $750 billion **literally was created out of thin air** - mostly by Jeff Bezos. It exists only in the heads of investors, and it changes day by day - if investors decided tomorrow they were willing to pay $3,200 per share of Amazon instead of $1,600 (say, because they’re much more optimistic about the economy), suddenly, **another** $850 billion would be **created out of thin air**. And instead, if they decide they’re only willing to pay $200 per share (say, because they’re concerned that a bunch of economically ignorant lunatics will come to power in the US and destroy the most productive economic system the world has ever seen), that $750 billion just vanished into thin air. > > So, about $16 billion of Bezo’s wealth comes from the actual assets of Amazon, and the remaining $123 billion comes from the value of Amazon as a business - literally, created from thin air. You suggested Bezos could feed 16.7 million children. Let’s think about how he might feed these children with these two different types of wealth. > > How can he feed children with the assets of Amazon? Amazon is productively using it’s assets (comprising $16 billion of Bezo’s wealth) - its computers, its warehouses, its delivery vans, its inventory. Obviously it would be incredibly short-sighted to liquidate (sell of) any of this - these assets are what make Amazon a functioning business in the first place. > > So let’s look at the $123 billion, the fraction of Bezo’s wealth that comes from the ephemeral business value of Amazon. Can a child eat business value? Of course not. It barely exists - it exists only in the head of the investors. It doesn’t represent cash, or assets, or food, or even a claim to these assets in the future. In a very real sense, this $123 billion exists only on paper. > > This is true not just for Bezos. Most of the wealth of the billionaires (and most millionaires) in the US is not in the form of cash, it’s in the form of ownership of productive businesses. And most of that value is just perception. > > Yes, in isolation, Bezos could sell some stock to other wealthy investors, and generate some cash to feed some kids. But what do you think would happen if you suddenly required every wealthy person in the US to sell 2% of their assets in order to fund this tax? Where to do you think the actual **cash** to buy these assets (and feed these children) will come from, if every wealthy person is scrambling to raise cash themselves to pay the tax? So if we really want to get rid of billionaires we should abolish the stock market and forcibly devalue Amazon, Microsoft and Wal-Mart respectively. I’m actually surprised no one on the Left is suggesting this. ---
**Author:** ![Mijin](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/mijin/32/9369_2.png) [@Mijin](https://boards.straightdope.com/u/Mijin)\ **Post date:** [January 31, 2019, 2:26am UTC](https://boards.straightdope.com/t/should-we-allow-individuals-to-hold-billions-of-dollars-in-their-pockets/828614/137 "2019-01-31T02:26:58Z")
> [@Ruken](#): > > Re: wages and displacement: > Amazon pays minimum $15/hour. Per BLS, retail sales paid $11.24/hour in 2017. Retail trade employed more people last month than ever, and that’s expected to keep growing. That’s not to say there hasn’t been decreases in subsectors or geographical changes to where the jobs are. Well Amazon only recently increased their minimum wage, basically because all the negative news about many Amazon employees being on food stamps shamed them into doing it. Not the free market trickling down on the common worker. Disclaimer: I am someone who believes in free market capitalism. But even a free market needs the government to referee the game, and the balance in the US has swung far too much towards corporations. Unsurprising really, in a system where corporations can legally give politicians unlimited bribes. ---
**Author:** ![Ruken](https://avatars.discourse-cdn.com/v4/letter/r/f475e1/32.png) [@Ruken](https://boards.straightdope.com/u/Ruken)\ **Post date:** [January 31, 2019, 2:32am UTC](https://boards.straightdope.com/t/should-we-allow-individuals-to-hold-billions-of-dollars-in-their-pockets/828614/138 "2019-01-31T02:32:25Z")
> [@dorvann](#): > > So if we really want to get rid of billionaires we should abolish the stock market and forcibly devalue Amazon, Microsoft and Wal-Mart respectively. I’m actually surprised no one on the Left is suggesting this. I typed abolish the stock market into Google and gota bunch of results that I’m not sure I want to read. ---
**Author:** ![Ruken](https://avatars.discourse-cdn.com/v4/letter/r/f475e1/32.png) [@Ruken](https://boards.straightdope.com/u/Ruken)\ **Post date:** [January 31, 2019, 2:40am UTC](https://boards.straightdope.com/t/should-we-allow-individuals-to-hold-billions-of-dollars-in-their-pockets/828614/139 "2019-01-31T02:40:26Z")
> [@Mijin](#): > > Well Amazon only recently increased their minimum wage, basically because all the negative news about many Amazon employees being on food stamps shamed them into doing it. > Not the free market trickling down on the common worker. Seems more likely to me that they needed to hire over 100k seasonal employees in one of the tightest labor markets we’ve seen in a long time. ---
**Author:** ![Mijin](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/mijin/32/9369_2.png) [@Mijin](https://boards.straightdope.com/u/Mijin)\ **Post date:** [January 31, 2019, 2:54am UTC](https://boards.straightdope.com/t/should-we-allow-individuals-to-hold-billions-of-dollars-in-their-pockets/828614/140 "2019-01-31T02:54:03Z")
> [@Ruken](#): > > Seems more likely to me that they needed to hire over 100k seasonal employees in one of the tightest labor markets we’ve seen in a long time. Unemployment is not \*that much \*lower than last year or the year before so why didn’t that logic apply then? Also, I’m not sure if you’re arguing against a living wage, but saying that a company making billions of dollars of profit per year _eventually_ was forced by the market to pay a reasonable minimum wage is not a very good argument against legislating they pay that all along. [Previous page](https://boards.straightdope.com/t/should-we-allow-individuals-to-hold-billions-of-dollars-in-their-pockets/828614.md?page=6) [Next page](https://boards.straightdope.com/t/should-we-allow-individuals-to-hold-billions-of-dollars-in-their-pockets/828614.md?page=8)