Should We Abolish Billionaires? - by Robert Reich

Found here. My comments in bold.

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Dr. Reich's premise is astonishing. Who is this "we" he refers to? And on what basis does "we" get the power to decide who has too much money and who else deserves it more? And by what moral process would "we" abolish the ability to earn more than a billion dollars?

The fact that anyone would take Dr. Reich seriously now is astounding.

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America now has more billionaires than at any time in history, (How could it be any other way? It's easier now than ever to become a billionaire, as inflation takes its toll on the value of the dollar.)

while most Americans are struggling to make ends meet. (Undocumented assertion. Indeed, Dr. Reich's intent is to set us up with an "us vs. them" scenario - - classic socialist agitprop.)

With such staggering inequality, (Dr. Reich does not establish that some people having more money than others is unequal.)

it’s fair to ask: should we abolish billionaires? (No, it's not at all fair to ask.)

There are basically only four ways to accumulate a billion dollars – and none of them is a product of so-called free market capitalism. (Oops. Dr. Reich will outline these, some of which are illegal, but admits that none of them are capitalism. 

So Dr. Reich, if capitalism doesn't create billionaires, then is it socialism? Dictatorship? Monarchy? Oh, I know: It's democratic socialism, the only system currently in operation in the US.

Yet we will discover that capitalism is the target. )

Billionaires themselves aren’t the problem. (Really? Then why does Dr. Reich's solution involve punishing billionaires?)

The real failure is in how our economy is organized. (That is, our current economy, with its ever-increasing government intervention into the free market over the past few decades, is organized improperly.)

One way to make a billion is to exploit a monopoly.

Jeff Bezos is worth $150 billion. You might say he deserves this because he founded and built Amazon. But Amazon is a monopoly with nearly 50 percent of all e-commerce retail sales in America (and e-commerce is one of the largest sectors of all retail sales). Consumers have few alternatives. (50% is not a monopoly. Amazon has many competitors. 

And in fact, it started out very small. "The company began selling music and videos in 1998, at which time it began operations internationally by acquiring online sellers of books in United Kingdom and Germany. The following year, the organization also sold video games, consumer electronics, home-improvement items, software, games, and toys in addition to other items."

In actual fact, Jeff Bezos started off with a small, risky venture that eventually grew into the huge successful company it is today. Thus, we can only conclude that Dr. Reich hates it for its success and is duty-bound by his socialism to advocate for destroying it.

Further, Bezos himself started from nothing in life. "While Bezos was in high school, he worked at McDonald's as a short-order line cook during the breakfast shift. He attended the Student Science Training Program at the University of Florida. He was high school valedictorian, a National Merit Scholar, and a Silver Knight Award winner in 1982. In 1986, he graduated from Princeton University with a 4.2 grade point average and Bachelor of Science degrees in electrical engineering and computer science..."

Bezos worked at McDonald's! Here is a obviously smart guy, self-made man who had an idea that turned him into a billionaire. But Dr. Reich, who has created nothing, who has never worked in the private sector, who has never made a payroll or started a business, can't allow this to happen ever again.)

Nor do many suppliers who sell through Amazon; for the first 25 years of its existence, Amazon wouldn’t let them sell at a lower price anywhere else. (If this is true, what is the problem? Such agreements are voluntary, legal transactions that no one is forced to accept.)

And Amazon’s business is protected by patents granted Amazon by the U.S. government and enforced by government. (In other words, Amazon was so innovative that the government granted them patents to protect their intellectual property. This apparently is bad.)

If we had tough anti-monopoly laws, and if the government didn’t grant Amazon so many patents and trademarks, Bezos would be worth far less. (Yes he would, because then other companies could steal Amazon's innovations and technologies and for zero investment in talent or product development do exactly what Amazon spent years and millions of dollars to develop. 

So if Dr. Reich has his way, companies like Amazon would not invest in innovation, because that money would go right down the tubes when competitors obtain it for free.

That sounds totally fair to me.)  

The same applies to people like George Lucas, Oprah Winfrey, or any other figure whose brands, ideas or creations depend on copyrights and trademarks, which are laws that have been dramatically extended in recent decades. (In other words, your intellectual property, creative ideas, and innovation does not belong to you, they belong to everyone, er, government.)

If these were shortened, these people would be worth far less, too. (A good thing, apparently.)


A second way to make a billion is to get insider information unavailable to other investors.

The hedge-fund maven Steven A. Cohen is worth an estimated $12.8 billion. Now, how did he do it? According to a criminal complaint filed by the Justice Department, insider trading at Cohen’s SAC Capital was “substantial, pervasive, and on a scale without known precedent in the hedge fund industry.” (Ah, he gained his money illegally. This has nothing to do with the matter at hand.)

Eight of Cohen’s present or former employees pleaded guilty or convicted for using insider information. Cohen got off with a fine, changed the name of the firm, and apparently is still at it.


A third way to make a billion is to pay off politicians. (Hmm, government corruption. And Dr. Reich wants even more?)

The Trump tax cut was estimated to save Charles and David Koch– each of whose net worth is estimated to be about $50 billion – and their Koch Industries – 1 to 1.4 billion dollars a year,not even counting tax savings on offshore profits and a shrunken estate tax. (This is a bad thing?)

The Kochs and their affiliated groups spent an estimated $20 million lobbying for the Trump tax cut, including major donations to politicians.

Not a bad return on investment: More than a billion dollars a year back for $20 million put in.

Koch Industries has also been a major beneficiary of government programs to fill the Strategic Petroleum Reserve, provide roads and access to virgin growth forests, use eminent domain to seize private land for oil and gas pipelines, get oil subsidies, and profit off federal lands. (Sounds like another government problem.)


A fourth way to be a billionaire is to get the money from rich parents or relatives.

About 60 percent of all the wealth in America today is inherited.

That’s because, under U.S. tax law – which is itself largely a product of lobbying by the wealthy – the capital gains of one generation are wiped out when those assets are transferred to the next, (That is, money that has already been taxed is not taxed again at death.)

and the estate tax is so tiny that only 0.2 percent of estates were even subject to it in 2017. (A crying shame. What a great opportunity for government to tax it again!)

(Hmm, these are the only ways to earn a billion dollars? Starting from scratch to start a business and getting successful, like Bezos, isn't in the picture? Prudent investing can't be done? Inventing a great new idea can't happen? This apparently is the world that Dr. Reich lives in. 

Incidentally, Dr. Reich is worth millions.)

America is creating a new aristocracy of people who never worked a day in their lives. (Undocumented assertion.)

Let’s abolish billionaires by changing the way the economy is organized. (Overthrow the Bourgeois.)

This doesn’t mean confiscating the wealth and assets of the super rich. (Yes it does.)

It does mean getting rid of monopolies, (Dr. Reich is unfamiliar with anti-trust laws?)

stopping the use of insider information, (Already illegal. Martha Stewart certainly discovered this.)

preventing the rich from buying off politicians, (Already heavily legislated. But we note for the record that government is the problem here by being corruptible. If it were returned to constitutional constraints, there would be a lot less power to be corrupted.)

and making it harder for the super-rich to avoid paying taxes. (The "super-rich" do what everyone does when they file their tax returns: They look for every legal way to avoid taxes. 

"Avoid" is not the same as "evade." 

If the super-rich are avoiding taxes, it's because tax law is written that way. If they are evading taxes, that's illegal. Either way, it's a failure of government...)

In other words, creating a system in which economic gains are shared more widely. (Which is a defacto confiscating the wealth and assets of the super rich. Dr. Reich can't even remember what he just wrote.)

Entrepreneurs like Jeff Bezos would be just as motivated by say, a $100 million or even $50 million. (But there's not going to be any confiscation of wealth, you see.

And on what basis does Dr. Reich ascertain Bezos' motivation? How is it possible that government has the power to say, "Mr. Bezos, we know you will still be innovative and entrepreneurial at $100 million, we know you will be just fine, so we are going to take everything else.")

But the cost to our democracy of billionaires with enough wealth and power to dictate the rules of capitalism for their own benefit is incalculable. (Remember when he claimed that the four ways of becoming a billionaire had nothing to do with capitalism? So now it's capitalism....

This is the brilliance, the shining stars, one of the Anointed Ones who know better than everyone else how to spend your money.)