Monday, September 25, 2006

The funny thing about rich

Back in the day (the 80's) there was something called the trickle down theory.

To my small brain it basically said:

Create conditions that make some people very rich and they will spend that money which will in turn pay other people who will turn around and spend their money and so on. In this way they share the wealth. But the first thing is to make sure that conditions are right such that a dude gets rich.

Which sounds pretty damn great. But then I think about this rich dude. How much money can this guy spend? I mean come on, I'll bet in part he got rich by eliminating almost all of his competition.

Some rich folks sock it away or invest it wisely for their kids. So that Junior might someday grow up to be president of the United States.

Some start to feel guilty about having all that lettuce and not enough excuses for putting it in a sandwich (or more likely protect it from being taxed out of their pockets) and start some kind of charitable foundation or start building libraries and schools.

But sometimes I wonder what would happen if some of the rich took out a list of every single person who ever worked for them. All those people who helped make them rich and bequeathed their former employees something in their will - gave a little back for the hours of toil and energy and life expended for low wages.

I suppose a rich dude wouldn't because if he tried to do that instead of donating his money to buy some fancy park benches or a build a museum, the government would tax the pants off of him (his cold buried corpse that is). But say he did, would all that money divided up amongst all those people buy each of them a candy bar? A TV? A pair of shoes?

1 Comments:

At 11:56 AM, September 28, 2006, Blogger Groucho Castaneda said...

To answer your question:

Former General Electric CEO Jack Welch has a net worth of $680 million. General Electric has 305,000 employees. Divided up that's $2,229 per employee. Bill Gates, meanwhile, is worth $58 billion with a mere 61,000 employees, bringing each Microserf's share to $950,819.

Of course, that's a bit simplistic considering a good portion of Welch and Gatees' money comes from investments, and also that "every single person who ever worked for them" could arguably extend beyond direct employees of GE and Microsoft. It's also a bit unfair, particularly to Mr. Gates, since he has already made millionaires of plenty of his underlings: even many mid- and lower-level Microsoft employees who've been with the company since the beginning (or at least the early 90s) have seen their stock options grow to six or seven figures.

But, to address your bigger economic question: yes, "trickle-down" economics (i.e., supply-side economics) is a load of horseshit. Basically, it's the product of a bunch of Republicans in the 1970s reviving the dessicated, discredited corpse of "classical" economics in order to provide a rationalization for the ridiculous, socially harmful tax cuts of the Reagan and Bush II eras.

 

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