The Dems Childish View of Wealth

For the longest time, I've had this vision in my mind about how AOC, Liz Warren and the rest of the Evil Party view wealth.  Their mental image of a rich person is from Scrooge McDuck cartoons, swimming and playing in vast piles of gold coins and other material wealth.

Their reaction to the fact that billionaires exist and are a positive thing in society are just so stuck at this four-year-old mental image.  This Twit's Tweet is a perfect example (name redacted to protect the moron), from an article at FEE (the Foundation for Economic Education).

No, Twit, people like Jeff Bezos, Elon Musk, Bill Gates and the other billionaires aren't human incarnations of Scrooge McDuck; nor are they Smaug the Dragon from The Hobbit.  Smaug didn't play and swim in his gold coins, but he immersed himself in them and slept on them. 

The FEE article is a good starting place, asking the question, "Is Jeff Bezos Smaug the Dragon?"  It's a easy question to dismiss.  With a publicly stated net worth of $108 Billion and the richest man in the world, he doesn't live in a double wide off a dirt road in Arkansas, or a 3BR/2BA ranch house off a two lane road outside Seattle.  He definitely has "creature comforts", five mansions and a private jet, but the nice thing about being a billionaire is that those comforts don't soak up much of your net worth.  More than 95% of his net worth is in the market value of the portion of Amazon and other businesses that he owns.

And what is Amazon made of? Again, we’re not just talking about piles of money and luxury goods here. We’re talking about a business. For example, there’s the massive operation that takes the Amazon.com orders you and I make: warehouses full of computers processing oodles of data every day. Then there’s all it takes to fulfill those orders: facilities that cover acres, 100,000 electric delivery trucks, etc.

Those are the kinds of things that make up most of Bezos’s treasure: not stuff for personal use, but stuff that is made to make other stuff. Economists call such stuff “capital goods.”

Note that Bezos' treasure isn't gold coins or jewelry or things like that.  The capital goods that are the vast majority of his wealth are only worth something if they're being used to make things for other people.  They're not something everyone in the general population would likely want.  

The distinction is vital because of the plans that Liz Warren, Bernie, and all the other communists Democratic Socialists have to "tax the wealthy".  What happens to that wealth if Jeff has to sell some of Amazon to pay his wealth tax?  A sudden mass of Amazon stock on the market, especially if the fund managers and other professionals know he has to sell it, will drive the price down on markets.  The same thing would happen to every other company that another billionaire owns part of when that billionaire needs to pay their wealth tax. 

Maybe the DemSocs don't care: they still get their 2% of all wealth over $50 million and it doesn't bother them at all if Bezos has to sell more shares of stock, driving the price farther down. 

The first major side effect of that, though, is that they lower the net worth of everyone that's invested in those billionaire's companies, from major market movers to working people trying to save for retirement.  That lowers the government's revenues.  Who's to say that with a credible threat to require assets be sold to pay taxes, that all of the world's stock markets won't collapse?  I think Liz Warren would view that as a feature not a bug.

The second major side effect is that Amazon, like most retail companies, isn't a high margin company guaranteed to be around for a long time.  Big, successful companies go out of business all the time.  Just enter “Sears” in your favorite search engine, perhaps with the word bankruptcy. 

In the bad old days the DemSocs seem to long for, there was a two class system: the feudal lords and the peasants.  As long as they have the power and are on top, that's all they care about.