We have all seen, especially lately, charts like this one:
99 out of a 100 people reading this, including myself, are bunched up in the clutter between 40% and 65% growth since 1979. That year was approximately when my adult life started, so this chart shows my progress, or perhaps lack of it. Be that as it may, the rich make much more money, and have even more concentrated wealth, than everyone else.
I outlined this in another post recently where I discussed the distribution of wealth. Of course, that article is not about the 1%, it’s about the 0.0001%, or the superrich. Sometimes people are rich or superrich because they take things away from other people, they steal. Names like Bernie Madoff or Jordan Belfort come to mind.
Most of the time, however, people are rich or superrich not because they are taking anything away, but because we’re giving them the money willingly. If we want to stop the gap from widening, we can’t do it by taxing or dictating to business. J.P. Morgan Chase is going to pay Jamie Dimon more than $20 million a year in compensation whether we like it or not. And most of us are definitely not qualified to judge whether he is worth it. That’s up to the board of directors of J.P. Morgan Chase.
Today I came across this article showing that the Detroit City Council voted to sell 39 parcels of land to billionaire Mike Ilitch’s company, Olympia Development of Michigan, for $1. The land will become the site for a new arena for Ilitch’s Detroit Red Wings hockey team. It has an assessed value of around $3 million. Remember, Detroit is bankrupt. It just gave $3 million to a billionaire! Can I give any better example of how the 99% willingly give vast amounts of money to the rich?
According to the same article, nearly 60 percent of the cost of the new hockey stadium—some $260 million—is being funded with public money provided by the state government. This is at a time when the governor of Michigan and the bankruptcy court are demanding the gutting of city worker pensions and the selloff of public assets because the city supposedly has no money. The $260 million handout to Ilitch is more than enough to cover the city’s current cash flow shortage of $198 million. This money could be used to remove the city from bankruptcy! But they are giving taxpayer money to a billionaire!
VIP tickets at a Justin Bieber concert cost $400 to $600, and they usually sell out. This is what millions of people in the 99% group are willing to pay to an apparent juvenile delinquent with musical talent.
Last weekend we got to watch the Super Bowl. A 30-second advertisement cost $4 million. That’s $133,000 per second. Companies are willing to pay that much money, per second, because they know it makes us buy their products later and reward them and their CEOs handsomely. And all the while we enjoyed watching the commercials.
With football, it does not end there. Peyton Manning earns $18 million a year. I heard that he didn’t output that much during that game, but we’re willing to pay it nonetheless. The lowest price tickets at the Super Bowl were $500. The highest price tickets were $2,600. The game was the most watched TV program ever, with 111.5 million viewers. 111.5 million people, most of them in the 99% of income range, are willing to pay and watch a bunch of young millionaires and multimillionaires have fun on TV.
Tom Hanks is a great actor. He tops the list of the highest net-worth actors, at $350 million. He makes some $20 million per film, plus profit participation. Our highest paid actors can make that much money because millions of us line up to pay $12 at the movie ticket counter to see their movies. We’re willing to pay. We enjoy paying.
There is income inequality in America because Americans voluntarily pay a lot of money to a select few at the top of the pyramid. We can close the income gap by stopping the consumption – which of course would cause a recession, unemployment, and more income gap.