A Stradivarius violin is worth a million dollars in Isaac Perlman’s hands. It’s worthless in mine.
A set of surgical tools are worth 500k in the hands of a surgeon. They’re worthless in mine.
Facebook, Google, and Apple are worth 2 trillion dollars. If we nationalized them and gave them to Black America as slave reparations, they would be non-functional and close to being worthless as they would be if they were given to any random group of people.
I think many people are stuck in the archaic “Forty acres and mule “ mindset of wealth which made sense when we were largely subsistence farmers. Just divide things equally and everything will be fine.
Maybe the question shouldn’t be why does Bezos have so much, but why do the working class have so little? I don’t think it’s just evil billionaires sucking up all the wealth. My parents generation was fixated on saving for the future. My generation not so much.
There is no massive transfer of wealth and income from average Americans to the very rich, in fact there is a massive transfer of wealth and income from the very rich to average Americans.
The averageincome for Americans in every quintile of income has gone up. Over the past 50 years the average income for people in the bottom 20% of income has gone up 28.8%. The average incomes in the top quintile has gone up a lot more, but that does not mean that there has been any transfer. Transfer involves taking from one group and giving to the other.
On the other hand, after transfers the lowest quintile of income receives 3 dollars in government money and benefits for every dollar earned. The second quintile receives 42 cents for every dollar earned. And the third lowest quintile receives 5 cents for every dollar earned. All this money comes from the upper quintiles, the fourth quintile pays 10 cents of every dollar to the government, and the upper quintile pays 22 cents of every dollar and the top 1 percent pays 28 cents for each dollar earned. That is all actual transfer, money taken from one group of people and given to another group.
These are not examples of tax avoidance. Not reporting tips, off book businesses are ways to evade taxes, which is illegal. Tax avoidance is the practice of arranging business and actions to minimize tax liability within the parameters of the law.
It’s things like this that make it challenging to respond to your posts. You made a specific claim, that a big part of Bezo’s wealth came from other retailers that Amazon has put out of business and millions of their employees that Amazon has put out of jobs. That the wealth isn’t primarily from growing the pie.
Ruken has done an excellent job in rebutting this claim. But instead of address this specifically, in post #184 you start talking about the US being the richest country in the world, income disparity, universal health care, nutrition, right leaning ideology, etc. When I question the relevance of these, you follow up in post #186 about flaws of unregulated capitalism, wealth distribution, and relative GDP of various countries. It’s like a smorgasbord of haphazard distractions. Maybe there is merit to some of those items on their own, but they don’t support your claim in any way.
(A) You’re missing the point if you oppose minimum wage TODAY because you might support higher taxes TOMORROW. At present you understand that, due to GOP refusals, workers will NOT get relief in the form of transfer payments, BUT you want to DENY them minimum wage hikes because, in some alternate universe, there MIGHT have been tax hikes and UBI. Right?
(B) Yes, there has been 1.67% average per capita productivity growth over the last 33 years, if that’s what you mean by “grow exponentially.” Median household income rose at 0.59% over the same period. In your own words, tell us what you think “share of the pie” means.
When ordinary Americans were evicted from their homes by foreclosures circa 2010, with the houses then purchased for a pittance by rich speculators, that was not a transfer of wealth from the average to the rich. Got it.
When big banks like Wells Fargo defrauded depositors to boost profits so they could pay big bonuses and dividends, that was not a transfer of wealth from the average to the rich. Got it.
When frauds like Trump University steal thousands from ordinary Americans to enrich multi-millionaire schemers, that is not a transfer of wealth from the average to the rich. Got it.
When local stores fail or grocery store checkers are laid off for “efficiency,” with the Walton family thereby getting many billions in profit, that is not a transfer of wealth from the average to the rich. Got it.
Et cetera. Please cancel my subscription to your newsletter.
Correct. The housing crash represented a loss of wealth, not a transfer. The mortgage holders try to reduce their losses by selling the house for less than the amount of the mortgage, but that’s cutting your losses, not transferring wealth.
We are talking about government policy. Your allegations against Wells Fargo, even if true, do not represent government policy.
See above.
Being able to buy goods cheaper is a benefit to the buyer. He or she can buy more with the same amount of money. In some sense, therefore, wealth is being created. The buyer gets some of it in the form of lower-cost or otherwise more desirable goods, and the more efficient Wal-Mart gets the business. Sucks for the less efficient shopkeeper, but overall, it is a net gain in wealth, not a transfer from the poorer to the richer.
Has anyone touched on who is “we” yet? It is painfully obvious to me the OP is just a poorly crafted general appeal to wealth-haters, with all the attendant pie-in-the-sky (no pun intended!) misunderstandings of the oppressed majority who feel unfairly left out of the capitalistic orgy of wealth being enjoyed in this country today.
If he thinks legally avoiding taxes is extremely antisocial, I can only guess he thinks illegally evading taxes is what? Demonic? Satanic? Extremely apocalyptic?
This is a ridiculous retelling of the mortgage crisis. The rich lost hundreds of billions in the mortgage crisis. UBS lost 37 billion, Citigroup lost 39 billion, Merrill Lynch lost 29 billion dollars, 39 different banks lost multiple billions of dollars.
This is just moving the goalposts. I have never claimed that no one has every stolen money from or defrauded someone poorer than them. However this is not how the really rich make their money. The top 1% is expected to pay 937 billion this year in income taxes alone.
Speaking from the home of Microsoft and Amazon, there’s quite a few people who believe that due to various tax breaks, they benefited from the local infrastructure and educated workforce more than they gave back through jobs (which while bringing in money, put a strain on said infrastructure, impacting everyone in the local area).
That’s not responsive to the MarketWatch article cited in #186 which directly supports my claim. But I think the larger problem here that makes it harder for us to see things the same way is a vast difference in ideology. The OP is an open-ended question, asking, in my view and interpretation, whether a socioeconomic system that allows a single individual to become as fantastically wealthy as Bezos has downsides for the rest of society; whether it might be symptomatic of certain systemic problems. What you’re calling “distractions” is evidence I provided of real and actual systemic problems, and their direct relevance in this context is that they all arise from insufficient socialization of wealth compared to other countries, such as a more progressive taxation system and stronger social services.
The impatience with this argument seems to come from economic conservatives posting here who take it as a foregone conclusion that Bezos is as rich as he is purely and simply and appropriately because he created a very successful business, that this concentration of wealth came solely from “growing the pie” and wasn’t taken from anyone else, and that any other perspective is an argument from ignorance. The reality is in fact considerably more nuanced. For example, the MarketWatch article I linked shows that Amazon’s dominance and business model continues to have significant negative impacts on the rest of the retail sector, potentially costing millions of jobs (and MarketWatch is not exactly a Marxist publication), thus refuting the claim that the retail sector is doing just great and Bezos’ wealth-gathering isn’t taking money from anyone.
In exactly the same way, at least some (not all) of the wealth of the 1% like Bezos represents a hoarding of finite resources that someone else consequently doesn’t have. The real “distractions” here are trying to introduce an elementary discussion of how the stock market works – and the fact that Bezos pays himself $86K a year – as an attempt to refute the fact that Bezos is genuinely and fantastically wealthy, that he possesses and spends tens of billions of real money in the form of cold hard cash. There is a valid argument to be had about whether it’s appropriate for a nation’s economic policies to be entirely focused on the most aggressive possible economic growth – a policy that disproportionately favors the wealthy – instead of more moderate growth and more equitable wealth distribution. The argument is fundamentally about whether or not – and by how much – one endorses the “greater good” approach to governance. Most other industrialized democracies are more closely aligned with the principles of regulated capitalism and greater social solidarity that are collectively referred to as social democracy; in them, someone like Bezos would be considerably less wealthy, and the social fabric there is considerably stronger. That isn’t coincidence; the two things are intimately related. You may disagree with that tradeoff, but it’s an argument worth examining, and one that I thought was directly relevant to the OP
No, the article doesn’t support your claim as far as I can tell. Nothing supports your claim because your claim isn’t accurate. Here is your claim that I was talking about:
What part of the Marketwatch article do you think supports the idea that Bezos’s wealth is not primarily from growing the pie, or that it is from retailers that Amazon has put out of business, or the employees of those businesses? You didn’t quote from it, and it doesn’t support your position.
What does alleged systemic problems, insufficient socialization of wealth compared to other countries, progressive taxation, and stronger social services have to do with that in any way? And that’s just your first paragraph. The other two paragraphs have similar non sequiturs that are similarly muddled.
Bezos’s wealth is primarily from Amazon shares, which he owned when they were valued at a certain amount, and then due to demand they were valued much higher. His wealth didn’t come from the retailers that went out of business or those employees. Nor did his wealth come as a result of revenue that Amazon recorded.
(a) No need to “perhaps” here because these data are available (US Census Table H-12). And the percentage of households with two or more earners is lower today than in 1984. There’s some pervasive myth that households now need two incomes when they didn’t before, but it’s not supported by the data. Two-income households certainly make more than one-income households (nearly 2x: $98k median vs $51k). And high-income households have, on average, more earners than low-income households. E.g., most top-quintile households have two or more earners, and most bottom-quintile households have zero earners.
(b) We might be, but your argument is thin. Not that this has much to do with pies. I already squelched the earners argument in (a). For my only two jobs where unions were a concern, they were a source of stress. ATUS only goes back to 2003, but it shows us steadily spending more time on leisure activities. We can eat out more because food has gotten so cheap that we can spend more on food away from home and still spend less, overall, on food (BLS Consumer Expenditures Survey). I question how many people actually “need” a smartphone. Internet? Sure. But not necessarily in my pocket, even if it sure is nice. I seriously question anyone who thinks it would be better to live a 19xx lifestyle on 19xx income with 19xx technology and consumer goods/services (not to mention healthcare). But of course stress is not necessarily rational, and it’s an interesting topic that may warrant its own discussion. I’ve made points against your hypothesis here but I’m sure I could find some data to support it as well. But that probably is an entirely different thread.
(c) Thinking your piece is smaller because the other guy’s got bigger is not the same as actually having a smaller piece. The solution there is education and mocking people’s irrational sense of fairness (which can be irrational to the point of self-harm, especially in people with certain forms of frontal cortex damage, see 10.1523/JNEUROSCI.4606-06.2007).
So: Your three points don’t even address whether there is a “massive on-going transfer of wealth and income from average Americans to the very rich”. The first point is simply wrong, the second is debatable and has nothing to do with transfers, and the third is about psychology. The available data may be consistent with a massive on-going capture of an increasing share of new wealth and income growth. But those are not the same thing as transferring from the not-rich to the rich.
There are different measures. By many international measures, it’s generally been decreasing globally. For the census rate in the US, we don’t have the 2018 data yet, but it was lower in 2017 than the average rate for the past however many decades you want to look back. But it’s not the lowest it’s every been. And it goes up every recession; I’d call the overall trend pretty flat since the late 60s.
Alternative measures, such as BLS SPM, show a slow downward trend. But that’s because it includes taxes and transfers. So that looks like we can ascribe any improvement to social programs, not the improving economy. If most people in the US who are living in poverty aren’t working or are only working part time, then it’s hard to expect a rising tide to lift their boats much.
And of course the people living in poverty today aren’t the people who were living in poverty 10 years ago. Some are, but the above point about immigration is correct. As mentioned previously, I’m ok with taxing me and Bezos and everyone in between more to improve people’s conditions.
This part:
What Amazon won’t tell us is that every job created at Amazon destroys one or two or three others. What Jeff Bezos doesn’t want you to know is that Amazon is going to destroy more American jobs than China ever did … for retail workers, Amazon is a grave threat. Just ask the 10,100 workers who are losing their jobs at Macy’s. Or the 4,000 at The Limited. Or the thousands of workers at Sears and Kmart, which just announced 150 stores will be closing. Or the 125,000 retail workers who’ve been laid off over the past two years.
Amazon and other online sellers have decimated some sectors of the retail industry in the past few years. For instance, employment at department stores has plunged by 250,000 (or 14%) since 2012. Employment at clothing and electronics stores is down sharply from the earlier peaks as more sales move online.
There’s also this article that it references (PDF) – the title is self-explanatory: Amazon’s Stranglehold: How the Company’s Tightening Grip Is Stifling Competition, Eroding Jobs, and Threatening Communities
This is not to say that Amazon is responsible for all the structural changes in the retail sector. What I claim, though, is that it’s responsible for a lot of them, and that a significant portion of its revenue gains is revenue that other businesses have lost, often small businesses and associated jobs that are more integral to their local communities. This refutes nonsensical attempts at deflection like this:
From what I’m reading, Bezos has liquidated around 10% of his Amazon holdings, and is throwing around tens of billions (billions, not millions) in cash for lavish houses, hobbies, and even a personal space program. Can we agree that with a higher marginal tax rate and less generous exemptions Bezos would have less money and the public coffers would have more? And therefore there would be more to invest in essential social programs, public infrastructure, and other important needs for healthy and vibrant communities? You don’t have to agree that this is the right thing to do as public policy, I’m just describing the arithmetic, to counter the implication being made by some here that great personal wealth like Bezos’ is only imaginary because {mumble mumble} … stock market … {mumble mumble}.
His wealth came, plain and simple, from Amazon’s phenomenal past performance and the anticipation that its future performance will continue the trend. And a lot of it, as indicated above, came at the expense of other businesses and their employees.
Well again you could sell them.
But also, wealth isn’t defined this way. If the surgeon could replace all those tools for $1k then I don’t get what you mean by them being worth $500k just because he’s providing a service that might be worth that.
Are you thinking of *utility *perhaps instead of wealth?
Yeah because black people, amirite?
Nationalization would not necessarily run a company like Google into the ground: just ask China. And even if it did, the shares are not worthless overnight.
Agreed. And people who talk about “obscene profits” ignore the fact that money is asexual and totally impersonal. Acquiring wealth in itself is not immoral or amoral or evil, although the means to acquire it may have been.
Now for Bill Gates and the pricing of Windows. M$ has a near-total lock on the PC market because it sells the operating system that everyone uses, apart from a relatively few Linux users. We have to pay whatever Redmond feels like charging because there is no other game in town. I would be delighted if Linux was used widely, and by corporate users en masse, but that has always been Next Year’s Thing for maybe a couple of decades and I am not holding my breath.
Then there is the moral question of what to do with your wealth. I’m sure somebody could find exact details, but AFAIK the wealthy do not start giving away their pelf until they already have an ungodly amount of it, and the amount given away is not a high percentage of their total wealth. In other words, it’s painless for them.
Back to Billy Boy. He is a prime example of the power wielded by money, even with good intentions. Yes, he has saved lives with his foundation, but the huge problem here is that his donations are selective. Inherently so, unless he has unlimited funding, but his choice of what to support determines what flies and what does not.
While I am all for soaking the rich, the problem is that they can easily evade taxes. Usually their wealth comes from a corporation that they own or have shares, so that is not their taxable income. If the taxes are too onerous, and they can’t find legal ways to reduce their tax bill, then there is always the offshore option and the PT lifestyle. One of the PT organioations keeps sending me newsletters, and they make fun reading, but it is obvious that such schemes are only really of any use to the well heeled because they are expensive to set up and continue. Looking through the other end of the telescope, the situation for the wealthy with a steady income that can be offshored is just to live abroad and keep moving, or go to a place with a very low tax rate. As always, there is a catch: tax havens such as Monaco are very expensive places to live.
Given that the wealthy tend to move to places with tolerable tax laws and a good lifestyle, does anyone have any suggestions on how to keep the wealthy funding the exchequer of their home country? This of course presupposes that you think they should in the first place.
