Where are the billionaire philanthropists?

In My Humble Opinion
61

I don’t think those statements are entirely fair. The robber barons of the Gilded Age were, if anything, even more selfish and ruthless than the billionaires of today. Much of their charitable giving was an attempt to redeem their sordid reputations and build social respectability.

And while a lot of today’s billionaires built some or all of their wealth through useless or counterproductive means like hedge funds and social media, other ventures like Amazon, Tesla, SpaceX, Microsoft, and artificial intelligence are genuinely productive advances even if often flawed.

62

Rather than relying on the billionaires to be philanthropists, the federal and state governments ought to heavily tax their fortunes.

63

Hear! Hear!

64

Hard to do when said billionaires effectively control the federal and state governments.

65

Spare us this vaguely socialist, but economically mush-headed nonsense that sounds like an angsty college freshman came up with it.

66

The OP imagines that we can somehow shame the billionaires into being philanthropic and I’m the one being unrealistic?

67

More on this though because it is interesting. To me anyway.

The extremely wealthy in the Nordic countries are not in the same stratosphere as the American extreme. They do have a large private wealth inequality to the rest though, even as income inequality is relatively low. But the other point is that the rest have wealth not counted as wealth on private balance sheets. It’s along the same line that social security benefits are akin to having assets used to purchase an annuity or having bonds … the implicit value of universal state benefits like healthcare and social insurance, the relief from economic insecurity that in the United States one needs a large asset portfolio to obtain.

68

you make fine points and I’m generally in agreement. A little more social welfare in the US is a good idea in my opinion. My point was that the Nordic System is not going to get rid of the extremely vague “wealthy” class that the OP is saying shouldn’t exist. The only way to do that is to move to some sort of collective wealth economic system (e.g. socialism), which, I mean, doesn’t have a great track record in practice.

edited to correct my post: it wasn’t the OP who said the wealthy shouldn’t exist, it was Cymers1980. My apologies

69

By the way: I never said that.

70

The donations themselves are perfectly legal. As a friend of mine who was a Senator’s staffer once mentioned on a tour of the Capital when the regular tours were shut down during a govt shutdown “your federal income tax isn’t a hard limit, it’s merely a mandatory minimum”.

What is not legal is for a governmental entity to spend funds that have not been congressionally appropriated to them. I may want to fund the National Park Service with the billion dollars I made selling off my Beanie Baby collection, but I have to write the check out to “Internal Revenue Services” and petition my Congresscritter to increase the NPS’s budget by the appropriate amount, even if I write “Smokey the Bear” in the memo section.

71

I’m Barack Obama and I approved this message!

72

There is a huge difference between wealth and wealth inequality. Wealth is a constant. It existed long before industrialization and capitalism, and in every nation-state of every political and cultural variety. Those at the top are a constant.

Wealth inequality is a variable. It changes greatly over time. Here’s a chart of the top 0.1% share of wealth in the U.S. 1913-2022.

In 1915 and 1918-29 the share peaked at 25%. Though you might think that the Depression would have greatly inflated that percentage, considering how badly the 99% were off, it had the opposite effect. Crushing speculation, especially in limiting 10% margin buys for stock, stopped the expanding market while much of the then-legal banking activity was curbed or outright criminalized. The Roosevelt administration enabled unions and the war meant that the most violent anti-union activities were discouraged by government intervention. That led the way to the 50s, during which enormously equitable treatment of union created lifelong employment, high wages, and pensions, paid for by twenty years of unmet needs and saved money flowing out to a world where the U.S. was the only major country not to have its land destroyed. This bounty flowed out into the community, although major environmental crimes continued to be overlooked. Economic paradise for many - except for obvious remaining victims - but only through an utterly unique and nonrepeatable set of circumstances.

The share of the top 0.1% bottomed at 7% in 1978 and has been increasing in almost a straight line ever since. I’m sure it’s back over 25% today. Much of the change came from the stock market. The Dow didn’t hit 1000 until 1972. Milton Friedman published the paper of the century that year essentially saying that nothing mattered for a company except its stock price (oversimplified, I know). Stocks returned to being speculative prognostications about a fanciful impossible future that sucked in the greatest fools and was infinitely manipulable by executives. Could anything else explain why Tesla’s market cap exceeded the next 5-10 car companies combined for several years? Other money managers found inventive, legal, quasi-legal, or grossly illegal, ways to turn bad assets in money fountains.

None of this ever returns to communities any more. Stock holdings and hedge funds pour money into a few and often fail to create the surrounding wealth that industrial employment with its need for hundreds of small part-makers created. Pure money goes into trivial amounts of luxury and the pursuit of the power to create more pure money.

This cycle did not emerge out of any natural selection. It was deliberately invented to do what it does. It is entirely legal. Wealth from stocks cannot be capped. Companies must grow or die and the stock price is the accepted indicator of growth, no matter how tortured that definition becomes. Wealth taxes are difficult to implement and virtually meaningless in a global economy. Somebody somewhere will go taxless and everybody corporation will move there. Three-quarters of American firms are incorporated in Delaware solely because of the leniency of its laws and courts. Pikatty in Capital plumb gave up and needed to invent an imaginary global tax system to get around this.

What can be changed is the society. It’s historically hilarious to see people like Carnegie hailed for their charity, when he and the others of his era were easily 100 times more evil than today’s billionaires. The people fought back against the trusts, against the anti-union armies, against segregated companies. They forced parties to accept progressive policies and got governments, once utterly owned by corporate interests, to force changes.

This can happen again. Anger is building. Billionaires cannot spend trillions of dollars to loudly proclaim they will put every working person in the country out of a job and not see tremendous backlash. Harnessing that anger into political power will take time and skill and charisma, but it’s happened many times before, and always in eras like this one where the inequality turns deadly. It won’t be wished away by platitudes of the “general welfare.” Companies will fight dirty. Yet a core need of consumerism is consumers. Destroy that base, destroy yourselves. Not much fun in being King of a bunker.

tl;dr Wealth is basic. Wealth inequality is changeable, by political pressure on governments.

73

Tangentially (or better) related, and something I posted on another thread: the social compact is effectively dead. When today’s uber-wealthy are actually (domestic) job creators, it’s a happy accident or a necessary evil – something they couldn’t get around.

In fact, Trump made big hay out of promising to resurrect the American dream, where ‘lower skilled’ jobs were plentiful, could create a middle-class life for a family, put fairly new cars in the driveway, afford home ownership, and put the kids through college, and allow one to imagine a stable and dignified retirement.

That was a tacit acknowledgement of what the oft-derided ‘redistribution of wealth’ in the last half-century really looked like: Radically upward.

[And, of course, the only thing Trump’s done about that particular situation is to make it markedly worse, further pushing wealth upward – Supply-Side Economics, to coin a phrase]

74

That’s not an argument that I’m in any way wrong.

The world doesn’t work like the fantasy that hard work and creativity are rewarded; they aren’t. Already being rich is what is rewarded. The people who think that their hard work and creatively will be rewarded are simply exploited for their gullibility, then discarded. They won’t even get the credit, much less the money.

75

They don’t. Successful companies (almost always) go public, and the shareholders then benefit from and share in that wealth. Innovation and entrepreneurship benefit the individual yes, but they also benefit society as a whole. There is more wealth now in the world than ever before. And, at least in the US, the poorest segment of society now have a standard of living higher than the poorest 100-200 years ago. The problem of course is that the wealth disparity has also grown in the past 100 years.

76

And while the effective corporate tax rate is likely well below the top line 21%, there are taxes paid by the corporation as well, contributing a share of the profits to the common good.

“All” is hyperbole. But is society writ large, inclusive of the large number of its members who have not had much in equities, be it tax protected or taxable accounts, sharing in those successes commensurate with its role in making these companies successes?

77

Good question. Probably not, but it is also not sharing in its failures to the same degree either. If Tesla goes bankrupt due to mismanagement, you aren’t going to feel that effect as strongly as Musk is.

78

I never said you were “unrealistic”. You are, however, apparently naive about the power structure in modern America.

79

Use Musk as the specific … odds you think of SpaceX becoming a company “too” big? critical to national defense? whatever? to fail? Taxpayers paying for any collapse not Musk?

Obviously we paid for the banks’ collapses.

Spirit Airlines failed. Almost bailed out but not. Will consumers bear a price even without the bailout, with higher fares? Yeah.

80

this is an odd angle to take. Will there be a knock on effect on airfare prices? Yeah possibly, but it’s difficult to predict and in no way can be considered a directly linked cost effect to consumers from the closing. That is like saying society paid for for Kmart closing in higher consumer good costs.