Source: P Photo/Charles Krupa
Posted on 12/05/2020 4:53:15 AM PST by Kaslin
Source: P Photo/Charles Krupa
Sam Jacobs is a 25-year-old on a mission. He’s trying to get possession of his trust fund, which holds more than $30 million.
What does he want to do with the money? Use it to destroy the very system that made his trust fund possible: capitalism.
Jacobs is not alone. According to The New York Times article “Silver-Spoon Socialists,” there are legions of young people just like him. The Democratic Socialists of America has recently been transformed from a fringe group of older leftists to a national organization 100,000 strong – with most of its members under 35 years of age – according to the article.
A lot of people Jacobs’ age have lots of money to give away. Citing the consulting firm Accenture, the Times reports that the Silent Generation (those born just before or during the Second World War) and the Baby Boomers will provide their heirs with up to $30 trillion by 2030, and as much as $75 trillion by 2060. A lot of those heirs seem to hate the fact that they are heirs.
“I want to build a world where someone like me, a young person who controls tens of millions of dollars, is impossible,” says Jacobs.
When you are contemplating a conversation with muddle-headed people, don’t expect clarity. But let’s suppose Jacobs’ real objective is to make things better for those at the bottom of the income ladder. How would you advise him to spend his inherited wealth?
Here’s the answer: He should do nothing. Nothing? That’s right, nothing.
Right now, Jacobs’ trust fund money isn’t sitting in a lock box somewhere. It’s a source of funds for the capital market. That means providing seed money for new innovations and paying for the equipment and infrastructure that make workers more productive. Most important of all, capital accumulation is what allows the economy to grow.
There is one thing economists are virtually unanimous about. The single greatest anti-poverty program ever invented – the thing that helps the most people for the longest period of time -- is economic growth.
Say the economy is growing at a rate of 3 percent. In four generations, people who today are earning $15 an hour will be earning $60 an hour, in real terms. A worker who earns an average wage of $50,000 will be earning $200,000.
Another way to appreciate this point is to roll back the clock. Only a few hundred years ago, there was very little capital accumulation and there was no economic growth. Aside from a king or queen here or there, virtually everyone was poor. They lived on the modern equivalent of about $2 a day. And that was the way all of humankind lived – going back for a hundred thousand years.
Capitalism (along with the concomitant capital accumulation and economic growth) is the reason why Jacobs isn’t scrubbing around in the forest for roots and berries, wondering where his next meal is coming from.
Could we ever reverse the process? Could we revert to a world in which everyone lives in extreme poverty again? That’s not impossible.
If Jacobs takes his money out of the capital market and gives it to the Democratic Socialists, heaven knows what they will do with it. But odds are it won’t go into the venture capital market or be spent in any other way that would increase worker incomes. If everyone in his generation removed their capital and spent it in frivolous ways, economic growth could be ground to a halt and even regress.
Talk to a socialist and you will almost always find you are talking to someone who knows little about economics. I’m not talking about rightwing economics. I’m talking about the economics you would find in almost any introductory textbook – regardless of who the author is.
Take Rachel Gelman, a 30-year-old “anticapitalist” who lives in Oakland, California and who is also featured in the Times article. “My money is mostly stocks, which means it comes from underpaying and undervaluing working-class people,” she says.
But where in the economics literature can you find convincing evidence that workers are systematically underpaid? You can’t.
And what does worker pay have to do with stock prices? Virtually nothing. The international rate of return on capital is determined in the world capital market and it tends to be the same regardless of what workers are paid.
Open any introductory economics textbook and the message will be the same. In the labor market, people tend to be paid their marginal product – which is the value of what they produce. Economic studies bear the theory out. There is only one group of people in the private sector who systematically benefit from money they did not earn or merit. They are called heirs.
Some people argue that there is a case for abolishing inheritance. If so, the silver-spoon socialists would have to be Exhibit A.
ONE class. We can’t squeeze out ONE class. We put men on the moon but have no capacity to construct ONE class for all High School seniors and college freshmen. ONE class.
We will talk about anything else. Lesbian dance, Tik-Tok, middle relief pitching for the KC Royals, but we won’t talk about ONE class on how socialism does not, has not, and will not work anywhere.
There are just as many people with trusts that feel the opposite. We’re in a 50/50 country. Half good. Half bad. Civil war here we come.
Yet, this hypocrite will use the money to shield himself from the world he wishes the rest of us live in - like Nancy Pelosi, for instance.
Gated communities, security systems, armed patrols in their neighborhoods, high- tech cameras around their properties - in neighborhoods far from Section 8, urban unrest or racial strife.
Hey idiot. $30M is seeing a net return if invested safely of about negative 3 percent per year. You can’t live long on that. Go get a job you useless twit.
A fool and his money are soon seperated.
There is no cure for stupid. If they want to give away their inheritance, fine. But they also want to make sure that everyone else gives away their inheritance, or has it taken away. And that is unacceptable.
There’s a sucker born every minute
Now the suckers identify themselves with Bernie Sanders T-Shirts.
This kid and his money will soon be parted.
Murdoch’s lefty sons are another example of why control over conservative media organizations should never pass via inheritance. Even if it’s Trump Jr.
The stupid. It burns.
My grandfather started a business in 1908 in Minnesota. It was sold in 2007 by the 3rd generation. Their father died in 1996 and they ran the place afterward.
They tried to sell several years earlier but the uncles in Calif and New Jersey said no as they were paying them money for their shares over the years for their retirement.
One day around 2006 they get a call from the finance guy at the company telling them they could get all the money for their shares at once instead of being paid out year after year. The uncles were in their 80’s and took the money. One day in 2007 I did a search on the family business and discovered it was sold to a competitor and after searching on the publicly traded company that bought it, I found it was sold for $20 million. I told my uncle and he was surprised as he was never told by his nephews. He never did hear from them.
My uncle said he wished they could have waited for the 100th year before selling.....
I worked at the company when I was in my 20’s and the 2 cousins were pretty worthless. One would leave his work for the other delivery guys and they had to go out and deliver his work to the customers after they had done their job. His dad then made him a “supervisor” where of course the real supervisor would do all his work.
Because socialism CANNOT work in practice, only in theory. Those who have ever had to make their way in the real world unassisted know this. Trying to make it work is akin to attempting to level mountains by raising the valleys up to the level of the peaks without bringing in any material from anywhere else. Anyone can see how to blast the peaks down to fill the valleys but that would merely vastly accelerate the process of erosion due to rainfall resulting in a plain at a lower level than the average height of the original terrain. For some reason there are always those who cannot grasp that due to the nature of socialism it can never end in anything but poverty. They spit out the word capitalism as if it were made of filth while not realizing that they have no idea of what it is or how it works.
If I had the opportunity to teach these people I would begin by giving an assignment to each to imagine himself the only human left alive on Earth and write an essay explaining what “natural human rights” he would have as the only remaining human and what duties he would have and then, as a follow up assignment, to imagine that he discovers a city full of people and explain exactly why he would suddenly claim to have new rights that he did not have as the only human and explain whether he has additional duties or is relieved of any or all duties by the discovery.
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