My Comments: I came across this the other day and failed to note the source. As an economist interested in the sustainability of the economy and sensitive to the growing divide between the haves and the have nots in this country, it caught my attention.
I’m not saying whomever wrote this is right. I think there’s more than a little self-delusion going on, but there are kernels of truth that don’t need more rules from government to make it happen. Those efforts have to be on education, health and infrastructure, which does imply the ability to pay for it all.
Posted: 09/11/2015 2:19 pm
A new study from Harvard Business School shows that economic inequality and stagnant middle-class incomes are big concerns for America’s business elite. And while it shows that the rich believe they will get richer and the gap will continue to grow, the study also shows that even the super wealthy prefer there was more equality. The numbers show that the top one-percent predict the distribution of future income gains to be 41 percent, while their preferred distribution of future income gains is 16 percent.
Despite what most people believe, the rich are standing there with open arms wishing more people would join them and experience financial freedom. It’s no surprise that this survey shows that even the ultra-wealthy want more equality. The U.S. economy is driven by consumer spending, so income inequality is bad whether you identify as poor, middle class or wealthy.
While the rich want to invite everyone into the club, the fact remains shared prosperity isn’t likely to happen anytime soon. It’s unfortunate because in my experience, most people are actually a lot closer to staking their fortune than they realize. But due to limiting beliefs the average person has been brainwashed about money, and most people settle for less than their fair share.
The other unfortunate side to economic inequality is that nobody has a viable solution to fix the problem. Democratic Presidential hopeful Bernie Sanders wants to tax the wealthy at 90 percent. He’s not alone as many people have suggested a higher progressive tax rate for the wealthy. This is a terrible idea. Not only will this hold back economic growth, it’s also extremely unfair. Essentially, you’re punishing someone for success and for a job well done.
Joe Lunchbucket, the small business owner who has a thriving business and built his fortune from the ground up, shouldn’t suffer and pay the consequences to make up for everyone else or help fix the deficit. What kind of message does that send? That’s not exactly setting anyone up for success who has big dreams of achieving the American dream and financial freedom. How dare you succeed? If you succeed you are going to pay for it. Where’s the critical thinking on that one?
The answer to fixing the deficit and fixing income inequality is innovation driven through capitalism. Many of the best ideas that work in anything are the non-linear strategies, or the non-obvious ways of getting things done. When the obvious doesn’t work, which it isn’t right now, it’s time to look at the problem in a non-linear fashion.
If you want to help balance the budget and reduce the federal deficit, instead of putting a gun to the head of the wealthy and forcing them to pay more in taxes, play to the vanity of large corporations and sell them the naming writes to streets, parks and other publicly held properties. Instead of I-95 it could be Johnson & Johnson Highway (or whatever company). Imagine that: billions of dollars come trickling into the government and it’s some of the best advertising a large corporation could buy. It’s no different than legalized pot in Colorado and other states bringing in millions of dollars to help support the economy.
We also need to educate the poor and the middle class on how to earn more money. Through capitalism, we can get the ultra-wealthy to sponsor the middle class for education purposes in exchange for a write off. It’s value for value. Capitalism built this country and it’s capitalism that will solve our problems.
The sustained rise in inequality is years in the making, but the truth is making money has never been easier because there are so many problems waiting to be solved. We just need to teach people how to do it.
The reality is that while higher education and even continuing education courses are certainly great accomplishments, they don’t teach the financial basics of how to get ahead and succeed in a free market economy. After studying the wealthy for more than 30 years, most millionaires will tell you the way they look at money compared to how the rest of the world looks at it is not even in the same ballpark. It’s like the two groups are operating on totally different planets.
If you’re one of those people whose financial situation isn’t quite where you want it to be, start focusing your mental energy where it belongs: on the big money! Making money is easy once you know how to do it.
In the meantime, the only way to close the income inequality gap is through non-linear ideas and strategies driven through capitalism.