Billionaires' Wealth Is Skyrocketing. Their Philanthropy Is Not
businessweek.com
businessweek.com
Some thoughts: -Billionaires primary derive their net worth from stock, which is difficult for them to sell. Paper gains, don't represent increases in cash flow. Sources of cash flow would include dividends and planned stock sales. Given the general plunge in dividend yields (4-5% pre-crisis, ~2% today) it's not hard to imagine that even billionaires have less cash at their disposal. Furthermore, given the market plunge and uncertainty the last few years, it would be hard for owners of major public companies to sell large quantities of their shares without signalling to the markets that they believe their companies are overvalued.
-Tax rates and deductions have changed. Shouldn't be a surprise that given the dramatic increase in marginal tax rates and the new limits on deductions that there would be an impact.
-Perhaps there are exogenous factors at play... maybe after a rush of great new non-profit ideas earlier in the decade, billionaires are seeing fewer ideas that excite them enough to donate significantly despite the obstacles mentioned above.
Article just strikes me as wealth bashing without even attempting to get into the more interesting part of the story.
With our technology, nearly nobody should need to live without health-care or in poverty. But so many do. And what is even more alarming: So many people do in the rich countries.
How is this justified by the thesis that the wealth of some people make the others richer too.
It is a myth of capitalism. That's it.
What is left to the 99%: Charities of the wealthy people that earn more by just stupid investing than most of the others with good ideas or entrepreneurship can ever hope to make.
Also those here hoping to rise up to the top should know that -- it is a lottery game and most of us will simply not win. Do we really, really want a world, where the "Winners take it all" and the others have to fall?
I know, in such a world, Human kind has lost.
Is Elon a Socialist or Fascist for the ~$500M Tesla got from the DoE or ~$2B from NASA to prop up that welfare space program?
All savers, even if they aren't founders/owners of companies themselves, create jobs by keeping their money in the financial system. Whether by owning stocks, bonds, private equity funds, or savings accounts, the resources are allocated to where they are needed most. When that whole system dries up, you get a credit crisis.
Obviously, yes, demand is important. Confidence crises can wreak havoc.. but simply saying demand is the only thing that's important is ludicrous when dealing with such a complex and dynamic system.
A bunch of bankers conspired to defraud credulous investors by selling them worthless mortgages as A-rated investments. This massive influx of capital into a non-productive sector of the economy nearly caused the entire system to collapse. These bankers then used the political influence bought with the money they made in order to shift the cost of their fraud onto the taxpayer.
Really, it's not that hard to understand. The only thing that is hard to understand is what this question has to do with the matter at hand.
1) Savers do not create jobs. Spenders create jobs. When you get a situation where people would rather save their money than spend it (ie. Japan) then you get deflation, and the economy contracts leading to lost jobs. This is why Japan is trying desperately to increase inflation through Abenomics.
2) To explain the credit crisis would take a lot more than just a few paragraphs, but your fundamental statement that it was caused because people stopped parking their money in financial instruments is just wrong.
1) Saving in itself does not create jobs, but savers allow for jobs to be created.
2) Not my fundamental statement at all.. My point was that the supply of credit (significantly shrunk due to reasons beyond a few paragraphs) can kill jobs.
Pointing out that markets require liquidity has nothing to do with the fact that there needs to be some sort of real economic value to sustain jobs.
It's not just rich people handing out jobs and deciding whether or not we should keep factories or companies open or not.
Capital is part of markets (granted a vital part). It's not the only, nor the most important part.
Lots of reasons for why credit can dry up, but the idea that jobs are only a function of demand is ludicrous.
Unfortunately, historically, all the evidence supports the 'rising tide lifts all boats' argument. While growth 'at the bottom' has slowed compared to the top, it's still growing. There are plenty of theories for why this is the case, but the data is is there.
Things are of course more complicated. But it is a fact, that the resources of the world are limited. Thus if few people hoard things, the others have less ... this effect might come sooner or later, but it will come.
What is popularly perceived to be wealth hoarding (people worth millions/billions) are really doing no such thing. Virtually all of that wealth is invested in one way or another. Stocks, bonds and even savings accounts result in economic value being moved to those who can use it most effectively (i.e., VCs, cities building bridges, companies expanding, etc.).
Of course in the brochures of Capitalism you see only the positives. But more and more the negatives are available too. VC companies roaming the world for land to buy and press out for investments. Local farmers can not anymore afford the prices for land and thus have to surrender -- and become paid employees. Many people become slaves of these VC companies -- they by companies for profit and when the profit is gone, they dump the companies. It is happening all over the world. The profit margin has to increase ever more to appease the investors.
This profit sensation has brought us thus far, that wealth gets more and more unequal divided and many people are exploited in sweat-shops in poor companies but more and more also in rich countries as in Germany.
Please don't tell us about the high-colored brochure Capitalism!
When Roosevelt launched the New Deal in the 30s, he prepared the country for new chances for many (if not to say most) of the people and thus for a decades of wealth for all. Reagan and his successors on the other hand dumped the country into an era of greed and misfortune for the 99%.