This is the promised follow up to The USA is a Third World Country.

As the great Robert Reich points out in How Much Wealth is Too Much?, there are now only five (5) ways to become a Billionaire, and none of them are good!

1. Exploit a Monopoly
2. Exploit Inside Information
3. Buy off Politicians (20M in lobby funds gave Billionaires a 1B tax cut)
4. Defraud Investors
5. Inherit It (60% of all wealth is inherited, tax free)

There are no “Self Made” Billionaires. As the great Robert Reich again points out, the origins of today’s Billionaires are Multi-Millionaires with the money and connections to get them going. Wealth is begot from wealth.

And due to all the inheritance and capital gain loopholes, every time it’s passed on it just grows and grows so millionaire families from a century ago had 100 times that before the turn of the century and now have billions today. (Unless, of course, they exploited a monopoly, inside information, or investors, in which case they may have went from millions to billions without the intermediate step.)

Then there’s the fact that most of them greatly increase their wealth by:

• manipulating stock prices for short term gains
• paying their workers as little as possible to increase profits
• using their success to get massive raises and bonues, and even bigger salaries and bonuses at their next job (CEO pay has skyrocketed 1,322% since 1978 [Economic Policy Institute], your pay has increased less than 18% … see the discrepancy (as their pay has increase 73X more than yours has)?
• borrowing against their wealth to invest in other ventures …
• including borrowing against their capital gains tax free (while paying less interest than they make on their new investments)
• contributing to lobby groups / SuperPACS that create new loopholes for them to exploit
• etc. etc. etc.

So they’re not benevolent.

Not to mention the fact that, in GDP terms, 6 Trillion is more than the GDP of every country on earth except for China and the USA. In fact, that’s more than the GDP of the bottom 128 countries combined (Worldometer). They have more buying power than 70% of the world. (And if you tell me it’s not right, I’d agree.)

But banning them is not the answer. If you try to take away their wealth, they’ll flee with it to another country. If you overtax them, they’ll invest all their money somewhere that doesn’t. If you limit their earnings, they’ll go elsewhere.

And while the departure of some of them would lead many of us to say goodbye and good riddance, the reality is that the country needs the (very) small number of “self-made” billionaires that start with millions and end up with billions and do it the old fashioned way they used to do it a century ago (after the US government busted up the railroad tycoons and brought in anti-monopoly laws) … i.e. there used to be a 6^th way, and that way was build a business that increased value for everyone involved … the founder, the shareholder, and the workers. Like Ford did.

Ford wasn’t perfect (do your research), but he knew two things.

1. if you want to grow your business, you need to make an affordable product
2. if you really want to grow your business, make sure you pay your workers enough for them to afford it

Billionaires like that grew the economy because they lifted all boats (not just theirs). It’s billionaires like that who are needed to grow it again. Hopefully some well meaning ones will come along and start the cycle on their own, but like Reich, I’m a bit doubtful. The government may need to stand up for the people who elect them and push the billionaires in that direction.

How? That’s a damn good question. But we’ll tackle that in our next post.

Why do I say this? Because the “official” US poverty rate is over 11.5% and the official US (long term average) unemployment rate (U3) has been averaging 5.7%, and we both know the official rates (far) undercut the reality since:

• in big cities and wealthy states, you couldn’t afford rent and food if all you made was $1 above the poverty line; and the US leads all nations with the highest overall child poverty rate of 20.9% (Source: Confronting Poverty)
• the official unemployment rate (U3) excludes part time workers seeking full time, people who have not been able to secure a job in more than a year, went back to school (even part time) in an effort to level up, etc. and this (U6) rate is usually 50% to 60% higher (putting the long-term average U6 rate at 10.1%)

None of these statistics should exist in a first world country!

According the World Bank, of the 162 countries they track with a poverty line, 18 have a lower percentage of people living in poverty, including pre-war Ukraine, Belarus, Vietname, Kazakhstan, and Algeria. Something is VERY wrong here!

According to Trading Economics, 68 countries have less unemployment than the United States, with Uganda, Liberia, Vietnam, and Mexico included in the countries under 3%! Something is VERY wrong here!

According to UNICEF, there are 34 countries with a lower child poverty rate than the USA. THIRTY FOUR! Something is TOTALLY FUCKED UP here. You are (way) better off having a child in Slovenia, Czechia, Poland, or Croatia than the good Ol’ US of A.

Moreover, if you’re a blue collar worker or a low-tier white collar worker, you’re also screwed since you’ll never be able to pay off your student loans as almost everything you make will go on rent and food. And even if you’re true white collar middle class, good luck buying a house or sending your kids to college.

While all the economists and politicians want to tell you how great things are because the averages keep going up and up, this is all a facade to prevent you from finding out the truth that things have actually getting worse for you since the eighties (when “trickle on”^*, which the Republicans like to call “trickle down”, economics were introduced) because the median is not getting better. (In good years, it’s barely holding steady.) The problem with averages is that they include everyone, which includes billionaires that are collectively worth more than 6 Trillion dollars. (If Bezos moved to a small town with under 1,000 people where the average income was 35,000, the average income per person would suddenly be over ONE Million dollars, while the median would stay the same. It’s all lies, damn lies, and statistics.)

The problem is that our buying power has decreased considerably since the 70s (which was the last time things were really good for the average American) as our median family income has not kept up with rising costs (which should not be a surprise as the federal minimum wage in the US has not increased in 15 years). The relative cost of a house has almost doubled, and the cost of sending our children to a community college or trade school has almost tripled.

Here’s a simple table to break it down for you.

And yet another simple table:

When you break it all down, relatively speaking, the cost of almost everything has increased significantly since the 1970s. The only budget item that has stayed relatively flat (in the 10% to 15% of median household income) is food for a family of 4, but that’s only looking at the numbers. Today, most Americans can only afford cheap (ultra) processed foods, and even Fox News is now warning us about those! (If you were to compare spending on healthy food baskets, the buying power does not remain constant.)

In other words a significant number of you are poor (and much worse off than the majority of OECD Countries [Confronting Poverty]), unemployed, or both, and the way things are, this number that has been rising for decades is going to keep rising unbounded unless something is done. And until that something is done and these numbers start decreasing and level off at acceptable levels (5% max for poverty and 3% max for U6 unemployment), as far as I’m concerned, the US (and Canada, which switched from following the UK’s lead to America’s lead a few decades ago), is a third world country!

So what can you do about it? Some would say ban billionaires (because no one needs that much money and it should be shared more equitably) while others would say fix government (and ban SuperPACS and lobby groups that have too much influence over governments and divert them from your welfare to theirs) and others still fix economics (and what it actually measures), but neither is a solution on its own. It’s not about fixing the wealth imbalance (it’s always been there, it always will be), or ending lobbying (although we probably should end SuperPACs and limit funding levels from any individual or corporation), or changing the definition of economics (because, thanks to lies, damn lies, and statistics, there will always be ways to corrupt the measures and mislead the public), but about increasing the prosperity of the average blue collar and white collar worker, getting them back to 1970 levels, and putting them back on the path to increase prosperity (compared to the majority of the world and making the USA a true first class country again).

How? That’s going to be hard, especially since you’re one of the last “democracies” (well, not really, you’re a republic) still on a two-party system (which is easily corrupted and has been for decades and that’s why you’re not a first world country anymore), but if a party would come along and focus on the right things, it wouldn’t be too hard to right the course … especially since productivity of the average worker has increased almost fourfold since the 1970s due to American ingenuity and grit.

But first, let’s babble about those Billionaires and why they simultaneously are and aren’t the problem. Stay tuned.

^* Republicans have been telling us that “trickle-down” economics are good for us, when history has shown time and time again that they are not. In reality, those Billionaire tax cuts are “trickle on” economics, because that’s what the Republicans and their Billionaire buddies are doing to you, and if you don’t understand what that means, then type “golden shower” porn site into Google and it should bring up links to at least 30 sites that should have very graphic visual descriptions that demonstrate precisely what “trickle on” economics really is! (I asked Google how many golden shower porn sites and it said top 30, so I am assuming it will deliver at least 30 links to you.)

^# Statistics Canada is always years behind compared to other countries, with no good data beyond 2021, but the projection for Canada this year was a 10.1% poverty rate!