View: Warren Buffett and the Myth of the ‘Good Billionaire’(economictimes.indiatimes.com)
economictimes.indiatimes.com
View: Warren Buffett and the Myth of the ‘Good Billionaire’
https://economictimes.indiatimes.com/news/international/business/view-warren-buffett-and-the-myth-of-the-good-billionaire/articleshow/83502579.cms
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I can't really understand proponents of wealth tax...either they are very confused, or are intentionally obscuring the truth for their political purposes. Based on the author's pedigree, I have to unfortunately assume it is the latter. But either way it isn't a great look.
For example, in the article the author laments that Buffett's wealth went up by $X, but he only paid $Y in taxes, and that's not fair to middle class people. But middle class people benefit in exactly the same way - if you pay $250k for a house and a year later because of a housing boom it is now worth $350k, you don't pay taxes on that $100,000 you "made".
If the whole world decides a random rock in your back yard is worth $10M, you shouldn't need to give the government $3M while the rock just sits there.
For example, in the article the author laments that Buffett's wealth went up by $X, but he only paid $Y in taxes, and that's not fair to middle class people. But middle class people benefit in exactly the same way - if you pay $250k for a house and a year later because of a housing boom it is now worth $350k, you don't pay taxes on that $100,000 you "made".
If the whole world decides a random rock in your back yard is worth $10M, you shouldn't need to give the government $3M while the rock just sits there.
You don't even need to look at pedigree, the author's intentions are explicit in the beginning:
> So I regret to inform you that Mr. Buffett is actually the most dangerous kind of billionaire we have. The worst billionaires are the Good Billionaires. The sort who make it seem like the problem is the distortion of the system when, in fact, the problem is the system.
It's also obvious by what they don't say. The author very breezily mentions that Buffett has donated some money, but no amounts or anything.
side note: India Times, please get rid of the silly copy and paste override. It is just plain obnoxious
> So I regret to inform you that Mr. Buffett is actually the most dangerous kind of billionaire we have. The worst billionaires are the Good Billionaires. The sort who make it seem like the problem is the distortion of the system when, in fact, the problem is the system.
It's also obvious by what they don't say. The author very breezily mentions that Buffett has donated some money, but no amounts or anything.
side note: India Times, please get rid of the silly copy and paste override. It is just plain obnoxious
> because of a housing boom it is now worth $350k, you don't pay taxes on that $100,000 you "made"
Actually, in most states in the USA, you do. When your home's value increases, your property tax in nominal dollars increase.
https://www.marketwatch.com/story/homeowners-are-facing-the-...
Actually, in most states in the USA, you do. When your home's value increases, your property tax in nominal dollars increase.
https://www.marketwatch.com/story/homeowners-are-facing-the-...
Here is a better explanation from https://www.investopedia.com/articles/pf/07/property_tax_tip...
> In order to come up with your tax bill, your tax office multiplies the tax rate by the assessed value. So, if your property is assessed at $300,000 and your local government sets your tax rate at 2.5%, your annual tax bill will be $7,500.
> In order to come up with your tax bill, your tax office multiplies the tax rate by the assessed value. So, if your property is assessed at $300,000 and your local government sets your tax rate at 2.5%, your annual tax bill will be $7,500.
>>But middle class people benefit in exactly the same way - if you pay $250k for a house and a year later because of a housing boom it is now worth $350k, you don't pay taxes on that $100,000 you "made".
Just to note, you don't pay taxes on the speculative "profit", but you do pay property tax as some percentage of it's "value" upon reassessment by a blackbox.
>>If the whole world decides a random rock in your back yard is worth $10M, you shouldn't need to give the government $3M while the rock just sits there.
I totally agree. Unfortunately, that's exactly what governments do with cars and boats. No one should be forced to pay a tithe for owning property or risk being thrown in jail for refusing.
Just to note, you don't pay taxes on the speculative "profit", but you do pay property tax as some percentage of it's "value" upon reassessment by a blackbox.
>>If the whole world decides a random rock in your back yard is worth $10M, you shouldn't need to give the government $3M while the rock just sits there.
I totally agree. Unfortunately, that's exactly what governments do with cars and boats. No one should be forced to pay a tithe for owning property or risk being thrown in jail for refusing.
At least where I live, property tax is assessed based on home value, but the multiplier varies based on the overall budgetary requirements for the town. So it's not like you are just always taxed 1% of your home value(or whatever). If every house in the town doubles in price, and the budget remains the same, then whatever multiplier is used would halve. Which makes sense - if home prices increase it doesn't mean that the town actually needs to provide more services to the same amount of residents. Of course, towns frequently see increasing home prices as a sign that they can siphon more money out of people via budget increases, but that is a separate issue.
Interesting that every time wealth tax has been proposed by somebody, it always interestingly has the "limit" set above said person's own personal wealth.
> If the whole world decides a random rock in your back yard is worth $10M, you shouldn't need to give the government $3M while the rock just sits there.
Why not?
General taxation is done on two principles -- ability to pay and the principle of fairness. Those who have more pay more.
If you have a rock worth $10M in your back yard you can certainly pay. You'd have to get a loan or sell the rock to do so, but you have more ability to pay than anybody who isn't a millionaire.
And by not selling for $10M, you're demonstrating that the rock is worth more than $10M to you. So the government is doing you a favor by only taxing on the $10M rather than on the actual value to yourself.
Why not?
General taxation is done on two principles -- ability to pay and the principle of fairness. Those who have more pay more.
If you have a rock worth $10M in your back yard you can certainly pay. You'd have to get a loan or sell the rock to do so, but you have more ability to pay than anybody who isn't a millionaire.
And by not selling for $10M, you're demonstrating that the rock is worth more than $10M to you. So the government is doing you a favor by only taxing on the $10M rather than on the actual value to yourself.
Because if the world later decides the rock is worth $5, the government doesn't give you the taxes back. Taxes levied at the time of transaction are sensible and reduce the risk that people who own volatile assets will end up paying taxes without realizing gains.
They currently don't tax unrealized gains, so how do you know that they won't rebate losses if they ever started to tax unrealized gains?
Because the government doesn't have a history of reducing property taxes when house values decline. In Fairfield county, CT many of the local municipalities left property taxes at 2006 levels straight through 2007-2010 even though real estate was worth less if it were to be sold. Other areas did the same thing.
Think about this - I have un unrealized appreciation in an asset, and I am a normal person, the only way I'd be able to pay the taxes on my $10m rock would be by selling the rock. Wealth taxes can force a sale to cover the taxes. Practically, this is not something we want. In fact, most cities have laws designed to help people NOT be forced to sell. If every long time owner of an apartment in Oakland had to pay taxes on their real-estate appreciation, the majority would be forced to sell. Net: Wealth taxes are strongly regressive, and pro gentrification.
Think about this - I have un unrealized appreciation in an asset, and I am a normal person, the only way I'd be able to pay the taxes on my $10m rock would be by selling the rock. Wealth taxes can force a sale to cover the taxes. Practically, this is not something we want. In fact, most cities have laws designed to help people NOT be forced to sell. If every long time owner of an apartment in Oakland had to pay taxes on their real-estate appreciation, the majority would be forced to sell. Net: Wealth taxes are strongly regressive, and pro gentrification.
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“As America slouches toward plutocracy”
JD Rockefeller once was worth 2% of the US GDP.
The “sky-is-falling, everything is getting worse” narrative gets eyeballs but isn’t true.
JD Rockefeller once was worth 2% of the US GDP.
The “sky-is-falling, everything is getting worse” narrative gets eyeballs but isn’t true.
Rockefeller and standard oil was a big problem, and required large-scale government anti-trust actions to be fixed.
Do you see similar things happening now?
Do you see similar things happening now?
Can someone explain why someone who isn't Zuckerberg would argue that Facebook isn't a monopoly?
They don't have dibs on natural resources like oil or physical space like with railroads. In theory skillful people can create better analogues of Facebook and Instagram that would serve less ads, be more meaningfully engaging, collect less data etc.
That makes sense.
If you expand "natural" resource to include something pertinent to network effects (e.g. human attention is a resource) then I see that as the beginning of an argument in the opposite direction.
If you expand "natural" resource to include something pertinent to network effects (e.g. human attention is a resource) then I see that as the beginning of an argument in the opposite direction.
They don't have an ownership right on attention. Railway company might have some unique long term lease on the land. Each user can extract their data with takeout, delete account and if they must – use another service.
They have dibs on a natural resource called personal data.
Do they? I'd wager Google knows a great deal more about me than Facebook.
Maybe.
In that case I must be a very special case or they are absolutely clueless or something.
I see nothing but idiotic ideas coming out from Googles knowledge of my data:
- absurdly irrelevant and even insulting ads. I can easily count on one hand the useful ones I have got (one for a local shop and one for Jetbrains products I think).
- Google Now suggesting in the middle of the night that I should text the boss two levels above me or call a random girl I once helped with a computer(!)
In that case I must be a very special case or they are absolutely clueless or something.
I see nothing but idiotic ideas coming out from Googles knowledge of my data:
- absurdly irrelevant and even insulting ads. I can easily count on one hand the useful ones I have got (one for a local shop and one for Jetbrains products I think).
- Google Now suggesting in the middle of the night that I should text the boss two levels above me or call a random girl I once helped with a computer(!)
Same. I think these AI companies make too many assumptions on what people want and need. It's like people are lab mice they watch in terms of some experiment, but don't communicate with beside asking to name interests like technology or cryptocurrency and rate the quality of the call.
I agree in some respects. It's hard to leave Google and Facebook because their accounts are used to login to other sites and services. Also when you buy apps and switch mobile OS you don't have a right for a free copy of this app from a different store, i.e. not real ownership because your app is tethered to the store.
Because it isn’t.
Anyone can open a social media site. Anyone can use it. Anyone can leave it.
Being where everyone wants to be isn’t a monopoly when innumerable other venues are no harder to visit.
Anyone can open a social media site. Anyone can use it. Anyone can leave it.
Being where everyone wants to be isn’t a monopoly when innumerable other venues are no harder to visit.
If network effect means quality or “price” (in terms of what you trade, whether or not its money, for the experience) changes don’t lead to substitution between the dominant site and other sites, it absolutely is a monopoly, even if it would be equally easy to go to other sites. Monopoly is an empiricial, behavioral question of substitution between notional competitors, but not abstract question of available alternatives.
I'd say not monopoly, but anticompetitive behaviour like leveraging company's size, reach and cash to "forcefully" acquire competitors.
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Standard Oil was split as I recall. Similar action is geared towards Amazon, Google, Apple and FB
'by action' you mean it as been considered or is a 0< possiblity. That is along way from anything actually happening.
I mean various antitrust court cases and government hearings. Like recent Apple vs Epic.
Yes it was split. One of the child companies was called Esso, after the acronym S.O.
Fair enough. I know I’m personally not buying anything from Amazon anymore. Just saying it’s not been a one-way inevitable downhill slide like some people make out.
By the time standard oil was broken up, it had already dropped from >90% to around 60% market share and was dropping fast.
The government intervention just artificially sped up a process that was already happening.
The government intervention just artificially sped up a process that was already happening.
See [1] for a good summary. Then pair it with [2]. The full picture is, as usual, more complex than a catchy title can summarize, but the trends are pretty clear. If you're in the top 20% of earners, things are improving. If you're not, things are generally stagnant or getting worse. So we're heading for something that's kind of plutocracy and kind of a class-based system of "haves" and "have nots".
[1] https://www.pewresearch.org/social-trends/2020/01/09/trends-...
[2] https://www.pnas.org/content/117/1/251
[1] https://www.pewresearch.org/social-trends/2020/01/09/trends-...
[2] https://www.pnas.org/content/117/1/251
Plutocracy is the natural state of a capitalist society. But America managed to break out of it briefly in roughly the 1940s-70s period, and has since regressed to the mean. So in a "what your grandparents remember" sense, things have definitely gotten worse.
Warren Buffet is vertically integrated on Diabetes. He owns Dialysis companies, Dairy Queen, and the insurance companies.
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Not too mention at least one candy company. And several railways to transport the candies to the customers. And a power company to provide electricity to it all.
WB is probably vertically integrated into at least ten verticals if you look at it like this.
WB is probably vertically integrated into at least ten verticals if you look at it like this.
Imagine generalizing about any other group of people like this - ‘Myth of the good X.'
Billionaires are not going to get a lot of sympathy, but it’s repugnant to characterize entire groups of people with the same brush.
The problem with this kind of rhetoric is that it overplays your hand, and therefore ends up detracting from your core points. Most of us want wealth inequality lessened. Demonizing one group over another is not going to get us there.
Billionaires are not going to get a lot of sympathy, but it’s repugnant to characterize entire groups of people with the same brush.
The problem with this kind of rhetoric is that it overplays your hand, and therefore ends up detracting from your core points. Most of us want wealth inequality lessened. Demonizing one group over another is not going to get us there.
> it’s repugnant to characterize entire groups of people with the same brush.
No, it's not. This isn't about whatever imagined prejudice or discrimination you're talking about. As the synopsis makes clear, the piece is marking an argument about the how "There is no way to be a billionaire in America without taking advantage of a system predicated on cruelty." Warran Buffett is being attacked because he has been able to manipulate the American system of capital, which the piece suggests is fundamentally unjust, to his extreme advantage, while millions of Americans are pushed further and further to the margins.
You can disagree with that premise, but don't pretend that this is discrimination.
No, it's not. This isn't about whatever imagined prejudice or discrimination you're talking about. As the synopsis makes clear, the piece is marking an argument about the how "There is no way to be a billionaire in America without taking advantage of a system predicated on cruelty." Warran Buffett is being attacked because he has been able to manipulate the American system of capital, which the piece suggests is fundamentally unjust, to his extreme advantage, while millions of Americans are pushed further and further to the margins.
You can disagree with that premise, but don't pretend that this is discrimination.
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Imagine trying to equate an innate or irrelevant property like one's skin color or sexual orientation with one like "posesses billions of dollars somehow"
The whole reason the article focusses on Buffet is to explore exactly your worry that there might be any such thing as a mixed group of varying innocence being painted with a single brush unfairly.
Pick the best possible example and judge, does the best known example of a billionaire validate the idea of billionaires? And at least this analysis decides no it does not. You may argue that this analysis is in error but I'm addressing your question about the right to do the analysis at all.
Billionaires are artificial constructs. The entire class can be judged and un-created with no moral problem at all. One's billionair-ism isn't like one's atheism or albinism. We can decide any time we want that no such thing as a billionaire should be possible, and make it so.
The whole reason the article focusses on Buffet is to explore exactly your worry that there might be any such thing as a mixed group of varying innocence being painted with a single brush unfairly.
Pick the best possible example and judge, does the best known example of a billionaire validate the idea of billionaires? And at least this analysis decides no it does not. You may argue that this analysis is in error but I'm addressing your question about the right to do the analysis at all.
Billionaires are artificial constructs. The entire class can be judged and un-created with no moral problem at all. One's billionair-ism isn't like one's atheism or albinism. We can decide any time we want that no such thing as a billionaire should be possible, and make it so.
That equation is not one that I made.
Are we talking about groups of people based on intrinsic attributes, like nation of origin or gender? Or groups of people based on behavior?
"Myth of the good arms dealer" seems fair. "Myth of the good mob boss" seems fair. The article makes the case that there's no way to accumulate $1,000,000,000 without taking advantage of people in inexcusable ways, so I'm not sure I see your criticism as valid.
"Myth of the good arms dealer" seems fair. "Myth of the good mob boss" seems fair. The article makes the case that there's no way to accumulate $1,000,000,000 without taking advantage of people in inexcusable ways, so I'm not sure I see your criticism as valid.
I think finding similarities and generalization is part of scientific process, but "good billionaire" is a bad category.
If a category is entirely optional and not based on anything inherent, why is it wrong to generalise? Buffett could stop being a billionaire tomorrow if he wanted to.
If Buffett chose to stop being a billionaire tomorrow, would that fix any of the systems that allowed him to become a billionaire in the first place?
Sorry indiatimes.com, you have too much power, bandwidth and resources. Too much voice and impact. You are one of the worst kind of media outlets. I propose you immediately contribute all your assets, earned or not, into an asset pool where less influential journalism outlets may help themselves to it. Only then will justice be achieved. /S
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Anyone who likes Warren Buffet should look into his early career in corporate raiding. It's doubtful that you will still like him after reading about it. It's equally impressive how little attention it's gotten compared to the mountains of good press he gets now.
> It’s a set of social arrangements that make it possible for anyone to gain and guard and keep so much wealth, even as millions of others lack for food, work, housing, health, connectivity, education, dignity and the occasion to pursue their happiness.
Modern capitalism has done more to feed, house, and clothe people, provide for advanced medical care, educate people, and enable people to pursue their own happiness, than any other economic system we have come up with so far. The rise in prosperity of China and India over the past several decades as they adopt more capitalist economies has been astounding, as a couple prominent examples.
Capitalist excesses also abound, and there are many places that could benefit from more government intervention, and the USA is likely near the top of that list.
But that doesn't change the fact that the system that creates billionaires also has led to unprecedented prosperity and human flourishing.
Modern capitalism has done more to feed, house, and clothe people, provide for advanced medical care, educate people, and enable people to pursue their own happiness, than any other economic system we have come up with so far. The rise in prosperity of China and India over the past several decades as they adopt more capitalist economies has been astounding, as a couple prominent examples.
Capitalist excesses also abound, and there are many places that could benefit from more government intervention, and the USA is likely near the top of that list.
But that doesn't change the fact that the system that creates billionaires also has led to unprecedented prosperity and human flourishing.
Absolutely true. Almost all of what you describe happened when the USA had a 70-94% top marginal tax rate and very few billionaires, though. The grossest of distortions has come along after the pace of benefits has long since dropped considerably.
That doesn't apply to the stunning rise in prosperity in India and China more recently, though.
Inasmuch as the stunning rise in prosperity in China is relevant, it should be noted that China is a communist country, so it's not clear that any increase in prosperity there can be attributed to capitalism.
China is not economically communist. They have adopted a heavily capitalist economic model and have seen their prosperity rapidly improve since then.
He's given away something like $27 Billion so far. Getting upset because he has only paid tax on the money he has physically received and not on his net wealth seems a little disingenuous.