“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.”
“the Massachusetts Institute of Technology (MIT) announced that it would reinstate its SAT/ACT test requirement for applicants. In a departure from the trends set by other elite universities, MIT rolled back its admissions policy, implemented in the 2020–2021 admissions cycle, which made standardized test scores optional. Administrators cited key issues with “holistic” admissions standards, an increasingly popular method of equitably distributing open spots to students regardless of how well they perform on standardized tests.
In a statement explaining the decision, MIT Dean of Admissions and Student Financial Services Stu Schmill noted that MIT’s “research shows standardized tests help us better assess the academic preparedness of all applicants, and also help us identify socioeconomically disadvantaged students who lack access to advanced coursework or other enrichment opportunities that would otherwise demonstrate their readiness for MIT.”
Without an objective measure like a standardized test, low-income students—who may not have equal access to other pieces of the holistic pie, such as a plethora of Advanced Placement (A.P.) classes or numerous extracurriculars—have a harder time proving that they are academically prepared for an MIT education. A move that was intended to increase diversity and help low-income students, as it turns out, mostly helps low-scoring wealthy students—and makes it harder to identify talented yet underprivileged applicants.
MIT now distinguishes itself from other elite universities, a spate of which have removed their SAT and ACT requirements in recent years, primarily citing COVID-19 and diversity-related justifications for the policy change.
The original logic of such policies is based on the idea that SAT and ACT scores correlate strongly with income, which suggests that students from poorer households are denied admission to competitive schools solely because they can’t afford to ace the SATs.
However, omitting standardized test scores makes all applicants reliant on application materials that correlate even more highly with income, such as admissions essays. A 2021 Stanford study found that essays are actually more strongly correlated with household income than SAT scores. Thus, by omitting one income-correlated metric, one that is even more closely related to income takes prominence.
While wealthy parents can pay for test prep, they can’t take a standardized test for their children (well, almost never). However, with essay coaches and college counselors at their disposal, many wealthy students’ college essays can be manicured to fit exactly what schools are looking for.”
“Adaptation and the development of low-carbon energy generation technologies will both be required to address and mitigate the challenges of man-made climate change. And yes, the world is slated to get warmer, but humanity is not running out of time to avert a harrowing climate future.
Again, when bad weather meets poverty, people die. The recipe for successfully adapting to climate change is continued economic growth and technological progress.”
“Virtually everyone, regardless of skill, is much more productive in the First World than the Third World.” And that doesn’t just apply to high-skilled immigrants. It also applies to very low-skilled immigrants, who, when they immigrate, can tap into labor markets with efficiently run firms, predictable legal systems, and ample capital”
“The new president wants the rich to pay much more in taxes, in order to finance a $1.8 trillion plan to invest in things like child care, education, and tax cuts for the poor that are meant to reduce inequality.
But standing in the other corner of the ring is a sophisticated wealth management and accounting industry that is ready to fight, eager to temper every aggressive proposal and exploit every loophole to please their clients who pay them big bucks to defend every dollar.
Over the next few months — and over the next few years, if Biden’s plan manages to pass in some form or another — these forces will collide. Passing the tax bill is only the first step. The execution could be harder. No matter Democrats’ intentions, they may find that their plan lets tech billionaires off the hook.
And so the wealth management industry is brimming with a cocksure optimism that they can outsmart the bureaucracy.”
“The median Black household has a net worth of only $24,100, a fraction of the $188,200 in net worth the median white household has, 2019 Federal Reserve data shows.
And these numbers don’t always show the nuance of financial instability for many Black families. A quarter of Black households have zero or negative net worth, compared with a tenth of white families, according to the Economic Policy Institute.
The reasons for the wealth gap are complicated and multi-layered, with racism, historical injustices, structural inequality, and educational disparities all playing a huge role. So do career choices, marriage status, and inheritance levels for Black people, which are starkly lower than for white people. The practice of redlining, for example, under which the government would not guarantee loans for Black Americans who were trying to purchase homes, as well as the effect of mass incarceration on Black representation in the workforce, are just a couple of examples of how African Americans are systematically prevented from building wealth.
Consequently, here’s the harsh reality about being Black in America: The deck is often so stacked against you that the weight of it all can feel overwhelming — no matter your income, your net worth, or how much you’ve achieved. For African Americans like me, systemic inequities and generations of poverty can make it seem like whatever you’ve done is never enough, especially when you know you’ll have to help support relatives or make contingency plans for any number of scenarios out of your control.
The reality is that for those of us able to generate wealth and reach a level of comfort, we are often also financially supporting family members or paying down debt. We simply don’t have that generational wealth that so many white families have to fall back on and start out their adult lives with. Even two people earning the same income can be looking at totally different financial situations based on their race and class: One could be putting money into savings or investing, while the other might be using that same income to pay a family member’s rent or help support an aging parent’s retirement.
I know that people like my mother don’t have any real safety net other than relatives. There’s no inheritance coming. As a result, for far too many Black people, low income and low wealth translate into a lifetime of scraping by.”
“Among Black Americans, it’s not uncommon for those who can to help family members financially: Some call it the “Black tax,” a term commonly used in South Africa that refers to the obligations of first-in-the-family college graduates, professionals, or others who “make it” to assist their family members.
I’m happy to help out my mother by covering her needs when she’s short on cash. But it can be an emotional experience for her to even ask”