Should Billionaires Help to House the Homeless?
by John Lawrence
Wouldn't it be nice if capitalism were modified so that those who are super successful would have their earnings capped at, say, $100 million, and whatever exceeded that went to build affordable housing for the homeless? Is any invention worth a billion dollars? Can anyone spend more than a hundred million? The capitalist system is set up in such a way that successful entrepreneurs attract huge amounts of capital from investors. Are they rich because people buy their products? No, they are rich because rich people buy their stock.
A person's riches should be capped and the excess should be spent on society in general. Society is getting the short end of the stick while rich entrepreneurs get more money than they could possibly spend. A wealth tax would accomplish the same goal. The system as it exists today sucks because it is set up in such a way that the rich get richer, and the poor lose their jobs and their housing. Most of the successful companies today use the internet and automation to eliminate jobs. The more jobs they eliminate, the more Wall Street likes them and bids up their stock.
Then besides this, Trump and the Republicans give them huge tax breaks. The tax burden is borne by the middle class and the poor while the rich corporations buy back their own stock making them even richer.
Bloomberg reports:
Why are people like Bill Gates, Jeff Bezos and Mark Zuckerberg so incredibly rich? Sure, they’re great businesspeople, and they had the right ideas at the right time. But most importantly, when their businesses succeeded, they owned a large portion of the equity.
Equity, or stock, is the riskiest type of asset ownership. It’s the most volatile, and it’s the first to get wiped out when a company goes bankrupt. But it also has unlimited upside -- the gains can, in theory, be infinite. It’s the entire upper tail. So of course the largest fortunes that we see -- the richest individuals -- were made through equity ownership.
But the big payouts to other stockholders are also responsible for much of the vast increase in wealth inequality. In 1980, the richest 5 percent of Americans owned half of the country’s wealth. In 2012, it was almost two-thirds.
Stock represents nothing more than rich people, who have access to cheap interest free money spewed out by the Federal Reserve, spending that money to buy stock which bids up the price. Then they cash in and pay off the loan. Riches are generated not by a company selling goods and services to the general population, but by financial manipulation of stock values. Any sane society would limit these types of activities since they do not further the interests of society in general. The net result is money creation that goes immediately into the hands of the rich making them even richer and in a position to control the political system, setting up the laws so that they favor the rich even more.
