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The coming depression blog | June 22, 2018

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The Trouble With Billionaires

The glittering lives of billionaires may seem like a harmless source of entertainment. But such concentrated economic power reverberates throughout society, threatening the quality of life and the very functioning of democracy. It’s no accident that the United States claims the most billionaires – but suffers among the highest rates of infant mortality and crime, the shortest life expectancy, as well as the lowest rates of social mobility and electoral political participation in the developed world.

Those who make their living celebrating the lives of the rich were clearly delighted last month by the charity pledge from Bill Gates and Warren Buffet, since it showed what great guys billionaires really are.

So it wasn’t surprising that Robert Frank, chronicler of the rich for the Wall Street Journal, took offense this week when we wrote a piece debunking the virtues of philanthropy.

Our piece was actually an excerpt from our new book, The Trouble with Billionaires, and philanthropy is just one of our targets.

Some billionaires, such as Leo J. Hindery Jr., have made this point themselves. Hindery, whose contribution was to found a cable television sports network, put it this way: “I think there are people, including myself at certain times in my career, who because of their uniqueness warrant whatever the market will bear.” Similarly, Sanford Weill, long a towering figure on Wall Street, is impressed with the contributions of billionaires like himself: “People can look at the last 25 years and say that this is an incredibly unique period of time. We didn’t rely on somebody else to build what we built…”

Our society tends to regard large fortunes as evidence of great talent or accomplishment. Yet the vast new wealth isn’t due to an increase in talent or effort at the top, but rather to changing social attitudes legitimizing greed and government policy changes that favour the new elite. Authoritative and eye-opening, The Trouble with Billionaires will spark debate about the kind of society we want.

Attacking The Trouble with Billionaires in his daily blog, Frank argued that good education costs money and “the wealthy are among the few that can supply that right now. Would universities be better off if the wealthy spent their money only on yachts and planes rather than global-studies programs?”

But why are yachts and planes the only alternative?

How about taxes?

Our point is that if the wealthy paid taxes at the rate they used to pay only a few decades ago — in the prosperous early postwar years before the onset of the Reagan revolution — public institutions and programs could be properly funded and wouldn’t be so dependent on the largesse of the spectacularly rich.

Frank is right that “Good educations cost money.” And if the wealthy were made to pay a larger share of the tax burden, universities could afford to provide them, without having to go cap in hand to billionaires.

In fairness to Gates and Buffett, both billionaires have also supported higher taxes for the rich. Best if they’d stick with that.


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