“We do not have oligarchs in the U.S. the way countries like Russia do. Our millionaires and billionaires are prevented from pulling political puppet strings both by custom and by campaign finance laws which cap their financial contributions to some degree and require disclosures. Though companies do sometimes successfully lobby for government contracts and subsidies—Musk’s hypocrisy has been widely documented on this front—we don’t have widespread, unchecked corporatism where the government always serves to further companies’ bottom lines, or where companies become exempt from government scrutiny for having curried favor with the right people. And free marketeers tend to believe that the existing patchwork of subsidies and handouts ought to be stopped since they serve as market distortions, artificially propping up companies that wouldn’t succeed or be competitive on their own merits.
If Sanders’ point is not merely that wealthy people exercise undue influence on the political process (as oligarch implies) but rather that wealth accumulation always and everywhere ought to be prevented, as he insinuates when he mentions their superyachts, that’s an even weaker critique. People accumulate extreme wealth in this country most often through inventing a product or founding a company that millions or billions of people end up valuing highly. Consider Jeff Bezos, worth $177 billion, per 2021 numbers; Elon Musk, $151 billion; Bill Gates, $124 billion; Mark Zuckerberg, $97 billion; Warren Buffett, $96 billion; Larry Ellison, $93 billion; Larry Page, $91.5 billion; Sergey Brin, $89 billion. More often than not, that process is iterative, with tons of failures before striking gold. When a company is successful, those who were involved in its founding often scatter, taking their earnings and intellect and founding new companies, starting the whole iterative process over again.”
“Financial planning firm Ramsey Solutions’ 2021 millionaire study found that 79 percent of the 10,000 U.S. millionaires surveyed did not receive any inheritance from their families. Of those who did receive inheritances, who are in the top 1 percent, Federal Reserve data show those inheritances were to the tune of $719,000 on average. More than half of America’s billion-dollar companies have at least one immigrant founder who came to the U.S. as a kid. Extreme wealth, by and large, isn’t generated by investing inherited money, but by starting companies that bring value to millions of customers.”
“The ’08 financial crisis almost brought Tesla crashing down, and disastrous Falcon 1 launches around that same time almost left SpaceX in pieces. “That historic fourth flight on September 28, 2008 made the Falcon 1 the first privately built liquid-fueled booster to reach orbit,” writes Pethokoukis. “It saved the company. But would that launch have happened if Musk had left PayPal with $60 million less? Would Tesla have muddled into 2009 and beyond? Kaplan doesn’t think so.”
Nor does Musk, in fact.
Central planners like Biden and Sanders don’t appreciate how fragile many of today’s biggest and boldest companies—SpaceX, Tesla, and Amazon—once were. Serial entrepreneurs, who exit one venture and quickly invest their earnings in another, are oftentimes wealthy enough at exit that they would be hit with wealth taxes if the Biden plan or any of its evil twins become law. But two things must be kept in mind: Their wealth is rarely liquid, and that money often gets quickly invested into other ventures that we would lose out on if it had been taxed away.”