Courtesy of wikipedia.org
My blog last week concluded that the joke is on us if we keep giving money to billionaires who turn our dollars against us. I was referring to America’s addiction to consumerism and convenience at the expense of democracy. While our economy drives the globe’s, our prosperity is unevenly distributed. The world’s richest one percent increased their wealth by more than 33.9 trillion in real terms since 2015. Forty-three percent of that number were Americans.
Ronald Reagan’s trickle-down economy has never worked. The wealthiest among us support politicians who subscribe to the theory because it protects their fortunes. Elon Musk’s $277 million contribution to Donald Trump’s 2024 presidential campaign exemplifies that symbiotic relationship. Likewise, Peter Thiel’s “purchase” of J. D. Vance warrants scrutiny.
The cozy relationship between money and power isn’t new. Still, when the imbalance becomes too great, history shows that nations become destabilized. Witness the American and French Revolutions.
Donald Trump’s proposed budget for the coming year threatens healthcare for millions of Americans. In response, the Democrats have said, “Hell no.”
While the political parties wrangle, one billionaire, Mark Cuban, may have sensed that the unequal distribution of wealth in this country has reached its limits. In response, he proposes that corporations give shares in their companies to their employees.
The idea isn’t new. Amway founder, Rich DeVoss, wrote a book along those lines in the 1990s: Compassionate Capitalism. He proposed that by turning workers into a sales force, they could participate in a company’s success. Sometimes referred to as Direct Marketing, Avon and Mary Kay also embrace this model.
As a teenager, I became an Avon Lady. My high hopes to make a fortune didn’t last long. Forced to purchase products upfront, my sales never covered my costs. I had to quit or go into debt.
Like Direct Marketing, Cuban’s share proposal is flawed. Unlike pensions and social security, which provide a fixed income, shares fluctuate with the stock market. Many people with 401K retirement plans are aware of this drawback.
Cuban’s bright idea also fails because it leaves many Americans in the cold. A great number of them work in small businesses or provide low-paid services. Caregivers, housekeepers, and gardeners are examples.
A tender of shares has no meaning to them. One system would serve them better if it weren’t so easily tampered with. The tax code. Redistributing wealth is a charge of the government. When Franklin Delano Roosevelt was president, the super-rich paid 98% of their wealth in taxes. That sounds like a lot, but I don’t recall anyone selling his mansion in exchange for a bed in the poorhouse.
Today, the tax rate on the descendants of these tycoons has dropped to 48%. That’s because there are enough loopholes in the system to enable the super-rich to escape paying taxes. Donald Trump is an example.
Cuban is correct on one point. The country is due for a wealth adjustment. Too much of the cost of financing the government has been borne by the middle and working classes. That imbalance must be corrected. But leadership won’t come from the “compassionate hearts” of the super-rich. Ordinary Americans must achieve fairness for themselves.
When workers realized they deserved to share in the wealth they created, the Labor Movement came into being, bringing with it rights like a defined workday and safe working conditions. Consumers must arrange a dividend for themselves. It should come in the form of higher taxes on the oligarchs.
Yes, Musk is entitled to benefit from his electric car design, but the design didn’t make him rich. Those who bought a Tesla did. In a fair tax system, they are entitled to a dividend.
Billionaires may be a clever lot, but they could do with an ounce of humility. The ideas that earned them wealth didn’t drop from the sky as divine revelation. Society’s demands and society’s preferences rewarded them. Whether they welcome it or not, these oligarchs have an obligation to society.
Boycott: Tesla, Amazon, Apple.
