Monday, January 27, 2014

Richest 1% Own Nearly Half of World’s Wealth

This news headline from last week was designed to elicit negative reactions.  The gap between the rich and the poor continues to grow, not only in the US but in the majority of countries.  "In the last thirty years seven out of 10 people have been living in countries where economic inequality has increased," and we don’t have the political will to curb the growth.

Wow.  This situation sounds very serious.  Who are these cheats and swindlers?  Where did their money come from?  Why are they getting richer while the rest of us are not?  It’s not fair!

To answer these questions, at least for the US, I went to the Forbes list of the richest 400 people in the country.  This helpful reference tells how much they have and the source of their wealth.  

Starting with the top 10 we find Bill Gates.  He’s rich because we all like our computers and most of us use MS products to run them.  We make choices.  Next is Warren Buffet, who made money investing in companies that sell us things either directly or indirectly.  Both are famous for their charitable efforts and don’t seem to be bad or greedy people.  Next is Larry Ellison, also in software (Oracle).  Then come the Koch brothers who have a private company, which means they took all the risk with their own investment and were successful.  They are also identified as “mega-donors.”  The next four are members of the Walton family.  If you resent the fact that they are rich or think it’s unfair, stop shopping at Wal-Mart.  They made their money selling you things you wanted at bargain prices while providing jobs for over 2.2 million.  Some may disagree about the quality of the jobs, but their employees have the option to quit just as their customers have the option to shop elsewhere.  Michael Bloomberg rounds out the top 10.  He also started a company, has given away almost $3 billion and is so "evil and unpopular" that he was elected Mayor of New York City.

The next page shows a similar group:  Jeff Bezos of Amazon, two founders of Google, and three members of the Mars family – the candy company.  If we resent their wealth we can stop shopping on line, stop eating M&Ms and use a different search engine.  Everyone knows how Mark Zuckerberg became number 20.

Down the rest of the list are those who made their money through hedge funds, investments and real estate, but they didn’t make much money off the little guys.  We also run into Jerry Jones at 164 (Dallas Cowboys), Charles Schwab at 88, George Lucas at 109, Oprah at 184 tied with Robert Kraft (NE Patriots).  The list of sources of wealth includes familiar names like Nike, Menards, SC Johnson, Campbell Soup and Little Caesar’s Pizza.

These people did not make their money by lying or cheating or ripping people off.  Most of them made it by working hard to give us what we wanted at a price we were willing to pay.  Some of it we didn’t even need, like $200 sneakers, but we were willing to stand in line or even fight our way to the front of the line to get it. 

Sure, there might be some crooks and scoundrels and some people who are making a lot more than they deserve to be paid.  Sure, there may be some unfairness or misalignment of priorities, but nobody seems to be concerned about that when cheering for the quarterback making $50 million or the golfer making $78 million.  Most of these people got their money from us, and we happily parted with it.  It didn't fall from trees.

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