Also, the United States can just change its immigration laws to allow in as many doctors and engineers from other countries as we need. That’s one of the good points of having the highest standard of living on earth.
Again, want a refresher in the difference between income and wealth? Your exact quote that I responded to was:
How do you determine the wealth of the people earning between $220-249K? While there is certainly some overlap between the those with high income and those with wealth, in some years the richest people in the world have no income at all, while plenty of people making around $250K have no significant wealth. Again, I question how you determine that those remaining who make between $220-249K would represent 80% of the remaining wealth. Feel free to do the math in your post, as I guarantee that I can grasp it if you use valid numbers.
Nope. Neither of us are currently CEO, so I see no connection between who would be a better CEO and who is paid more now. There are people who are smarter than me and work far harder than me who make far far less than I do. They just aren’t as good as me at my particular job, which happens to pay very well at this time.
Again, nope. I said he would be a better CEO than I, not that he is better at his current job than I would be. At his current position, we’re in fact pretty much interchangeable as far as required skillsets. He makes more than I do because of his position, which he has because he was at the company first. If I had been there first, I’d be his boss and would do the job just as well. If he left tomorrow, he’d recommend that I be given his job, and if the roles were reversed, I’d do the same.
I wouldn’t move everyone up a couple of rungs. I’d find the most qualified people around, no matter what their current title is and no matter who they know or don’t know in the “right” crowd. In the end, I’d bet they’d do a fine job as a whole.
What does this have to do with anything I’ve said?
Exactly right. I worked for hours scrubbing filthy toilets for that coupon, and now I’ve burned it. I scrubbed those toilets for no compensation. No Big Mac for you!
No, we haven’t lost that value. We still have all that software, remember? It doesn’t vanish into a black hole when Bill sets his money on fire. We still have every good and service that Bill provided for us during his long years of work. He worked like a dog providing us with software. And now, we have his software and he has nothing. In other words, he donated that software to the world for free.
But I haven’t burned a Big Mac. Yes, if I spent hours creating a Big Mac, and then threw the Big Mac in the trash, we’ve lost value. But not if I create a coupon for a Big Mac, and then give it away, and the person I give it to throws the coupon away. I’ve lost nothing, I never had to make that Big Mac. The only person who’s lost anything is the guy who threw away the coupon. He could have had a free Big Mac, and now he doesn’t have one. Well, a dollar is exactly the same as a coupon for a Big Mac, except it’s also a coupon for a candy bar, or a loaf of bread or a supscription to the Straight Dope. It’s a universal coupon.
Of course something had to be created that was valued at $30 billion. That something is the software and infrastructure that Microsoft has provided for their fellow man over the decades. They’ve created billions of dollars of value. If we took all that software and tossed it in a pile and lit it on fire, we’ll have lost billions of dollars in value. But if Microsoft takes the billions in stored dollars and burns the dollars, we have lost no value. Microsoft has lost the value, but not the rest of us. We’ve gained value, namely the billions of dollars in software that now nobody in the world has to work to pay back.
Say I own McDonalds. You come in and scrub the filthy toilets for hours, and in return I give you a coupon for a Big Mac. You then take the coupon and set it on fire. I, the owner of McDonalds have lost no value. In fact, I’ve gained the value of the clean toilets. You, on the other hand, have spent hours scrubbing toilets and get nothing in return. Similarly, if Bill Gates sets fire to 30 billion dollars, the rest of us got 30 billion dollars of value from him over the years, and now we don’t have to give him anything in return. The biggest difference is that there were many many more chains in the cycle than the example of the employer who pays his employees in coupons they never use. If I owned a Walmart, and went to McDonalds and bought a coupon for a dollar, and then when you scrubbed my toilets I gave you a dollar, and you burned it, who lost? You’ve lost. I haven’t lost or gained anything, I paid a dollar for the coupon and I got my toilets cleaned as expected. The gainer is McDonalds, who got a dollar from me, and now will never have to give away a Big Mac.
Similarly, when Bill Gates burns his billions, the people who gain directly won’t be the people who bought Bill’s software, but rather the people down the line who won’t have to hand over their goods and services to Bill.
You are trivializing the most important effect here. You are literally losing all your great people. All your top artists, musicians, scientists, engineers, businessmen, lawyers, financial experts, yada yada.
The damage to the entertainment industry is easy to see, because the damage is in visible output. Virtually every person you see on network TV or in the movies would be gone, along with many of the technical people. If you don’t think that will have an effect on the quality of the arts for a long, long time, you’re crazy.
Now replicate that with damage to every other organization and activity in the country. Businesses, government agencies, all of them would lose their top people. There will be plenty of junior engineers, but all the project leaders and innovators are gone. A lot of your professors are gone, including all the top-tier ones. And so it goes.
You are all underestimating the value of human capital, and especially the value created for everyone by the top 1% operating at a very high level. There would be no Steve Jobs, no Jeff Bezos. No SpaceX. Burt Rutan would be gone. No private spaceships. Zuckerberg, Gates, and their equivalents all through the private economy.
Even if they left all their worldly possessions behind, or were all taken out by a rich guy virus, the loss of their talents and knowledge would be a huge blow to the country. Life would get a little grayer and a little duller and a little poorer for a long time, until we developed new human capital and started working our way back up. That would probably take a generation.
Atlas would shrug but the rest of us would survive. John Galt wasn’t as irreplaceable as he thought.
I thought of that, actually. Never let reality get in the way of a good punchline.
But there’s truth to it, as well. Everyone’s talking about what happens to us without the millionaires. What happens to the millionaires without the rest of us. Forget about the plumbers, who’s gonna cook their food, clean their bathrooms, etc.? I suppose someone among them could take on those things, but they’re all rich. How much do you pay a millionaire to get him to mop the floor?
The society on their starship would collapse faster than the one they left behind.
No; you are mostly losing the people who live off of our truly great people. The “great people” are generally focused enough on doing the things that make them great that they don’t pay a great deal of attention to making money. Einstein wasn’t rich. Nor do most fields even have people who are the top few percent of wealth. And as for “businessmen, lawyers, financial experts”, the top examples of those are some of the most destructive, parasitic and vile people around; we’d be far better off if they went somewhere where they could only victimize themselves.
In the arts, we’d lose the most popular, but not necessarily the “top”, depending on how you define it. I wouldn’t be surprised if the “top” artist in the world, by any non-monetary measure, was painting for him/herself and has never had their work seen by anyone other than a small circle of friends and family.
Jobs would be gone, but we’d still have a Woz. Not The Woz, but many people with the same level of skills that he has. Quite frankly, if I had to choose between a Jobs or a Woz to carry us forward, I’ll take a Woz any day. I’m pretty sure we’d survive just fine without the Gates (and I actually like Bill a lot), Bezos, and Zuckerbergs of the world, as there are plenty of youngsters incubating their projects as we speak. Rutan would be missed (although he can take his AGW stance with him to space), but we’ve already lost him (he is mostly retired) and we seem to be doing fine.
We don’t have to develop human capital, we just have to find the ones that are already out there to replace them. I’m pretty sure they’d be stepping up to the challenge pretty quickly.
Sam, you don’t know what the fuck you are talking about.
From here
That is of course when you work.
As for the better paid directors:
Leads in series won’t be around, but most of the supporting actors will be. None of the kids we met at NYU graduate film school are big name directors, and I bet none of them are making $250K a year - and they had to be damn good to get in. Spike Lee is the exception, not the rule.
Hey, I’m moving to Canada, because you people are damn overpaid if you think this. You think the average project leader makes this much? I had access to the Bell Labs salary data plots, and correcting for inflation very few people - in the good old days - made this. And that included brilliant innovators who revolutionized the field. I suspect some business school and law school profs might not be around, but business school profs make 2x what psychology profs do, so most psychology people do. I have a friend about to retire as a professor, who is quite well respected in his liberal arts field, and I can assure you he’d just love to be making $250K.
Now, Nobel prize winning scientists are gone, but everyone knows that once you win a Nobel prize it is unusual to do anything else very useful. The real innovators are the young, tenure hungry, researchers. There would be shortage of speech givers, I grant you that.
Entrepreneurs are another case. Few strike it rich a second time, so getting them out of the way would probably fuel innovation. We would have to replace the venture capitalists, but that should happen fairly quickly.
Gates being gone would be bad for charity. Ballmer and other top MS execs vanishing would probably add a lot of value to the company, something they haven’t done in a while.
Here’s a clue, Sam. Most of us don’t worship rich people and don’t dream of kissing their asses. Brangelina would be replaced within months. That new writing talent might get a shot, because the publishers money isn’t tied up in contracts with the fourth guaranteed best selling dancing with angels book. We’d survive quite well.
Others have covered the effects on business and entertainment, so let’s see the effect on government. In my state (and I imagine all the others), there’s only a handful of governemt employees who make 250K/year. Almost all of them are people who manage investments for the state retirement program or similar jobs. A few college coaches make more than that, but I’m not sure they’re state employees (their salaries come mainly from donations). Possibly one or two others, maybe a university president or supreme court judge, but that’s it. Even the governor doesn’t make that much.
[M$ bashing]
Some would argue that this would produce a net gain
[/M$ bashing]
For every famous millionaire actor/musician/artist/whatever there are dozens who are just as good who aren’t famous millionaires simply because they haven’t had the right lucky break. I’m sure its true of other industries as well. The “great people” are really “lucky good people”.
Don’t get me wrong. We’ll still need good artists, engineers, entrepreneurs, and managers to take the place of the good artists, engineers, entrepreneurs, and managers who’d we be losing when they blast off into space. But there are plenty of people who could easily step in and fill the shoes of the rich. The rich are a lot less special than you think they are.
This randian bullshit is as much bullshit now as it was when she wrote it. The idea that 2 percent of the people are somehow dramatically different from the rest of us, such that we could not get along without them is nonsense. Here it is compounded by the idea that the top 2 percent of salary equates to the top 2 percent of human worth, and by some fantastical believe that salary is entirely merit based. I know conservatives are happy with the idea of multi-million dollar compensation packages for CEOs who run their companies into the ground.
Most of us, however, don’t believe in a categorical difference between the 95th percenters and the 98th. I also think it’s clear that some here have a vast overestimation of the number of people making over 250 k. 2% is 2%. It is not 15%.
Destroying it all would have a MUCH different effect than converting to cash and taking the cash, though.
As acknowledged by me in earlier posts, taking it out as cash and disappearing it will have a short-term but not a long-term effect on the economy (my “long term” is decades, for the record), since removing cash is functionally just playing with the inflation/deflation rate in a way that can be relatively easily remedied in a extreme scenario like this.
Their spaceship runs on tungsten. Gates borrows against his Microsoft holdings, corners the market on tungsten, and loads it onto the ship.
The OP assumes the rich take their money with them. As I said, rich people aren’t dumb, and if they aren’t burying their cash in the backyard now, I’m pretty sure they’ll notice that cash is not much use in space.
As mentioned, those making less than $250K per year are going to have to be taxed at a high enough rate to make up for the 40% shortfall. So some proportion of the average salary is going to be eaten up by taxation, or else government services will have to be cut back radically. ISTM that this will have an effect that is exactly what progressives don’t want - shift the tax burden off the rich, because there aren’t any more rich, and onto the middle and upper-middle classes.
If it is true that the rich own so much of the country’s wealth, and they take that with them, then America is one fuck of a lot poorer in assets as well as in human capital. Sam Stone makes a good point as usual - the top performers in practically every field are gone. They may not be completely irreplaceable, at least not in the medium run, but I also don’t think they are no different from anyone else.
Regards,
Shodan
Two very good cases in point–hungry young people who A) had ambition and skill, B) came out of nothing into greatness, and C) had a niche available to climb into.
Those people don’t stop appearing just because the current crop of rich folks disappears. In fact, with all the surplus capital infrastructure around, they come up faster and fewer of them are derailed by bad breaks.
The problem is, by the hypothetical that you’re fighting a bit in your first paragraph that I didn’t quote–actually, let me stop there. We already have war plans with places like South Africa regarding what we’ll do if the supply of strategic minerals gets cut off. There is no earthly way, if we’re trying for ANY realism, that the rich guys get to leave with any significant portion of the world’s reserves of any given strategic metal without getting shot down as terrorists.
Anyway, the Fed is going to be perfectly within their rights to print off 24 Trillion Dollars. Just to stabilize the value of the dollar where it currently is, and not set off a deflationary cycle. How long can you run the government on 24 trillion dollars and the current taxes on people under 250k/yr income?
Based on 2012’s budget, you’d have around $1.6T of income (60% of the actual amount) and let’s go worst-case and assume the expenditures don’t change, at $3.7T, for a net shortfall of $2T/year. Around $0.4T of that is debt servicing, so we have $1.6T/year of unmet deficits.
Even after we pay off the national debt free and clear, replacing the physical dollars the rich removed from the economy in their escape leaves us 13 years to figure out what the hell we’re going to do.
People are paid the marginal value of their labor. This means if the highest earners left, those that took their place would be less productive. The economy is less productive and this hurts everyone in the economy. The economy is not a pie you can divy up so if one person leaves you can divide his slice amoung those left. It is like building a great wall and if one person leaves however many brick he would have layed are not and the wall gets built slower. If Jose Bautista left the Blue Jays you could not just say there are plenty of people willing to play third base for 13 million dollars a year, the team will not be affected at all.
A lot wealth is owning assets that aren’t really transferable.
Real estate - You can sell the ownership of it or you can take the ownership of it with you overseas. But you can’t take the property itself with you.
Employees - They’re one of the main assets in any service industry. And unless you plan on committing mass murder, they’re still going to exist after you leave. So the boss can leave but all the people who did the things that made up the company are still here. We talked about Microsoft - if Bill Gates went away but left 80,000 programmers behind, how long would it take to open up a new programming company? How long would it take Gates without those programmers?
Intellectual property - Ideas are owned but they exist separate from their owners. In theory, the owners could say, “I’m going away now. Don’t use my ideas while I’m gone.” But realistically, we’d still have all that knowledge.
Here’s what the wealthy can take with them:
Personal skills - Yes, a lot of wealthy people acquired their wealth by their own efforts. They have the ability to come up with good ideas or organize things. We’d lose these abilities and it would be a significant loss.
Portable assets - There are things the wealthy can buy and take with them. Strategic metals have been mentioned. So have works of arts.
Well, if the top 1% or whatever own 40% of the county’s wealth, and they somehow take it with them, then by definition we’re 40% poorer afterwards. But Bill Gates can’t just convert his wealth to $30 billion dollars worth of tungsten, because there isn’t that much tungsten in the world. But yes, the rich could trade their current assets for portable goods, and then take those goods and set them on fire, and then we’d all be poorer.
The question then is, why would we allow 1% of the country to destroy 40% of the assets of the country? Because they’re the rightful owners of those things? Except ownership is a social relation. Those people own things because we all agree that they own them. Property rights weren’t handed down by God or John Galt, they are a human invention that allow us all to lead more pleasant lives. If circumstances change so that respecting property rights doesn’t lead to more pleasant lives for everyone, then we’ll change those things.
As for the notion that we’ll have to drastically raise taxes on the middle class to make up for the shortfall in income taxes, well, wouldn’t that pale in comparison to the economic disruption of 40% of the country’s assets being shot into space? I mean, if we couldn’t stop it from happening, say. We’d be in the situation of Germany and Japan after WWII.
As for having to raise taxes on the middle class to pay for the income tax revenue that the rich no longer provide, well, losing the top 1% wage earners all at once would put us in an economic depression. We wouldn’t lose very many government workers or academics or scientists or professionals. We’d mostly be losing business owners and managers. It’s not that these people are irreplacable, it’s that having them all die, or be shot into space at once would be a tremendous disruption, even assuming they aren’t looting the country and taking half of it with them. 1% of the country is 3 million people. If three million people dropped dead at random tomorrow, it would cause tremendous economic chaos. Not because those people are irreplacable, but because they aren’t irreplacable overnight. Countries have survived plagues and wars and invasions and bounced back, but not overnight.