 All right, the video is actually called How Billionaires Are Damaging The Economy. Great title. And as I said, it's been 9.91 million subscribers, and the video itself has been watched 46,000 times over the last day. All right, I need headphones. You guys ready? And let's listen. And this is, some of this is motivated by the fact that the Patagonia owner, billionaire, has left Patagonia to a kind of a created and unprofit that will receive all the profits from Patagonia and distributed to nonprofits will distribute it equally. And a lot of people on the left are really unhappy with this. They're really unhappy with this and we'll see why. Whoops, you can't hear anything. That's because I've got this muted. Let me unmute it. Come on. All right. There we go. Recently, the CEO of Patagonia got widespread media attention for donating his company to charity while Jeff Bezos announced that he'll... That doesn't sound right. That's going through the wrong place, right? Let me do this. Okay, we'll try this again. Recently, the CEO of Patagonia got widespread media attention for donating his company to charity while Jeff Bezos announced that he'll give away most of his fortune close to 120 billion. We have this idea that rich people are wealth creators, you know, because they invest the money. 60% of Americans polled think billionaires like Elon Musk are good for the economy. Wow. That's pretty cool that 60% of Americans think that. That's more than I would have expected and a good sign that maybe there's still a little bit left of the American spirit. I would have expected that to be a much higher number 20 years ago. But I'll take 60%. It's better than the number I would have guessed. But the economic data reveals something very different. Notice that they're saying the economic data reveals something very different. And let's now see what economic data they actually present, what that even means, and whether these experts that they present are actually going to reveal data, data that's objective, rational based on economic science, we'll see. These people become a black hole for wealth and they start. Billionaires become a black hole for wealth. They suck it in. It's not a great image, a black hole. That's data. That's a really important data. They become a black hole for wealth to suck the wealth out of the economy. Where? They suck the wealth out of the economy. Where does wealth come from in the economy? How's wealth created in the economy? How does it show up in the economy? Somebody starts a business, an idea. I don't know. Sell books online. And a few people think it's a good idea. So they give him money, but they probably is going to fail. They don't give him too much money. And this business grows. Why does it grow? It grows because people use it because people find value in it. Why do they find value in it? Because in some marginal small way, certainly in the beginning, it improves their lives. Suddenly people realize instead of having to get in my car and drive to Blockbuster and buy the book there, I can just order it online from Amazon and it'll arrive in my home. Isn't that amazing? And slowly people keep buying more and more stuff from Amazon. Now, the reason they're buying more and more stuff from Amazon is because their lives is getting better and better and improving all the time because they're buying stuff from Amazon. And that's the real wealth creation. The real wealth creation is the improvement in the lives of the people that are buying from Amazon. And it's reflected by the fact that they're paying Amazon to do others. Now, Amazon, of course, is using the money that the people are paying the stuff, plus money they are raising from markets that now they can convince that this is a profitable business or can be one day a profitable business because people are actually using it and they hire people. And these people now have jobs and these people now have wealth that is possible because somebody, Jeff Bezos, started this company, provided a value to people, kept this company running, kept this company as a value-creating company, and thus they have jobs. Customers have an improved quality and standard of living. And yes, Jeff Bezos becomes a billionaire, but where is his billions? Oh, his billions, it's a sucking it in, a black hole. All Jeff Bezos, most of Jeff Bezos's billions are in the stock of Amazon. It's the fact that we all value Amazon so much, the fact that Amazon is so profitable, is so successful as a business that results in the fact that people's, that the stock is higher, which means all the shareholders of Amazon, including your pension plan, including your 401k, have made money because increased their wealth because Amazon's stock has gone up. It's gone up for Jeff Bezos as well. So where has he sucked wealth out of the economy? Has any made wealth creation possible in the economy? Isn't wealth creation only possible because of entrepreneurs, some of whom, if they're successful, are billionaires, become billionaires? Is all this wealth actually going? Why aren't spoke to a former trader? Where is this wealth going? It's in the stock. Indeed, if Amazon, and by the way, Elon Musk is experiencing this right now, if Tesla stock goes down 50%, guess what happens to Elon Musk's wealth? It goes down by close to 50% because so much of his wealth is tied up in Amazon, in Tesla. Indeed, Tesla went down quite a bit because it was announced that Elon Musk sold 3.8 billion dollars worth of stock in Tesla. Why? To diversify himself because so much of his wealth maybe to pump it into Twitter. That's certainly possibility that Elon Musk is holding Twitter up now and the money he's selling from Tesla is going into keeping Twitter afloat. But in any case, almost all that wealth is in the stock. And where's the rest of the wealth? Going. Why aren't spoke to a former trader and an economist from Princeton to debunk the top myths about the ultra rich? I'm not sure which one of these two is an economist from Princeton. Which one is a former trader? But I have to say, first of all, I've never heard of either one of these people. And second, you have to be really talented and look really far and wide to find two more ignorant people about economics than these two. It truly is stunning. No conception of wealth, zero sum mentality, fixed pie view and just an ignorance, ignorance of economics. I'm not a moralist here. I'm an economist. No, he's not. He's a moralist. He's a moralist who's pretending to be an economist. He has really, as you'll see in a minute, no clue about economics. Look at the economy. We currently exist in a situation where the super rich are getting massively richer very, very quickly. But didn't that massive wealth often start off humbly? Didn't Microsoft and Amazon start out in a garage? Aren't billionaires self made? This is Wyatt magazine. This is a magazine that has covered the billionaires who are self made. This is the magazine that's covered those garages. This is the magazine that should know that that's exactly the case. To become a billionaire, you need to make a million dollars every single day for three years. But that's silly. That's silly. Right now, the market could go up, I don't know, five percent and Jeff Bezos could make hundreds of millions. I don't know the exact number, but it's not about a million dollars a year over three years. That's a silly kind of way to think about it. The reality is that the value of these companies is determined by a marketplace, determines what expectations are regarding their future profitability. And that can change dramatically. Look at how much wealth Jeff Bezos, Elon Musk, and all the billionaires, particularly in technology, have lost over the last year, over the last 12 months. Billions and billions and billions and billions. Why? Because we've got inflation and because we're heading into recession, because the companies are probably not going to be as profitable as people expected not that long ago. There are some self made billionaires, but if you look at the statistics, increasingly more and more of them inherited their money. Data? Data? How many of the billionaires, the people who are defined as billionaires in the world today, particularly in the United States today, are self made versus how many of them inherited their money? That would be a good data point to have, but it's a majority of self made. Yes, you'll find a Walton family because Sam Walton, Sam Walton, made so many billions and actually left it to his children. I don't think he was riddled with a sense of guilt that demanded that he give it all away. They're like five Walton's on the list of billionaires, right? Five. And I don't know, you've probably got a few other families. That's certainly the case for the Walton's, the Mars. Yes, you've got the Mars, the Mars old family, money's been around for a long time. And there's what three Mars on the on the billionaire list. By the way, ranked 185th richest person in the world or in the United States, not that high on the list. So every generation, the amount gets smaller because it's divvied up through more people. Yeah, Sam Walton is one of the great Americans. Mars created one of the great food empires in the world. So good for them. I mean, they did phenomenally. They gave it to the kids. What's wrong with that? And what do these kids do with it? Well, it's in stocks. And what do they do with the rest of the money? We'll see in a minute. And the Trump dynasty, in fact, Trump's not even a billionaire. I mean, well, maybe he is a billionaire. We don't even know if he's a billionaire. His father wasn't a billionaire. They were rich. Yes. But are most rich people in America today because their parents were rich? I don't think so. I don't consider myself rich. But whatever I have, I have because I haven't inherited anything. I don't expect to inherit everything. I mean, this is and where's the data? I want the data, the data. You remember, they promised us data. How many rich people today are because of of of of inheritance? And I want I want to see how and indeed, even if they are because of inheritance, the people who made the money get to choose who to give it to. How many is very few. If you have to go as low as Trump, you're kind of desperate. The Mars family was 185. Trump is like 272. I don't know where he is on those way down there. You're really struggling to get families, to get billionaires that inherited their wealth. According to Forbes, most of the ultra rich grew up in wealthy families. How do you define wealthy families or notice this? Notice this. God, this is such. Most of the ultra rich grew up in wealthy families or in the upper middle class or in the middle class. So in other words, most of the wealthy people today, most of the billionaires, grew up in families middle class or wealthier. So it's just no question that if you grew up in a poor family, it's harder to make it. But do we know if those middle class parents actually gave money to their kids? And isn't it a massive achievement to go from middle class to be a billionaire? I mean, this is absurd. This is truly ridiculous. Or in the upper middle or middle class, upper middle or middle class, wealthy upper middle. That is just right there is a sign of incredible dishonesty that you're lumping those streets together when clearly the point you're trying to make is these are just rich kids of rich parents is becoming more important. How well do your parents? There's Donald Trump again. I mean, what what relevance has Donald Trump had for this zero nothing? How many of them are immigrants? If you want to be successful and you're seeing this all over the world, because you are competing with the very rich for the ownership of assets, and these guys have a passive income of billions of dollars every year, how are you earning $50,000 a year ever going to compete with that? Why are you trying to compete with the billionaires? What are you competing with them on? What do I compete with a lung musk for? I mean, he's providing with this enormous benefit. I'm paying for the stuff I buy from his company. Are we competing for what for a yacht? I don't compete with a yacht. I don't need a yacht. I don't want a yacht. What am I competing with a lung musk on? What am I competing with Jeff Bezos on? I mean, what are these people even talking about? The share of income going to the top 1% of households. I mean, this is dubious. These whole graphs are dubious. But yeah, the top 1% is done very well because of skill, because of globalization, whatever skill you have, you can now manifest it by creating values not just for Americans, not just for 300 million people, but now for 8 billion people that'll make you richer. Just ask LeBron James. The reason LeBron James is so much richer than Michael Jordan is the market for basketball is so much bigger than it was for Michael Jordan because of globalization. So yeah, the top 1% got richer, bottom 90% got richer by a smaller percentage because their productivity grew smaller. Why is this a problem? And indeed, the way they measure these things is wrong. So I won't even get to the fact that the whole way in which they measure is wrong and distorted, and the bottom 90% have done much better than the way what they're projecting here, but at least they're projecting that the bottom 90% didn't do worse than doing better. So look, the pie is growing. Everybody's better off. And I would argue that whatever increases the bottom 90% has is to a large extent because of that top 1%. That top 1% is where the jobs were created. That top 1% is what makes American businesses competitive with the rest of the world. That top 1% are the entrepreneurs. The top 1% are the high-end programmers that make everything else work. But yeah, nobody's, they're going to ignore this completely. That share has almost doubled since the early 80s. But although the world's richest are earning twice as much money as before, it doesn't mean they're investing twice as much. They're not investing twice as much? When you go and look at the data, real investment has actually gone down since inequality has started to rise up. That's just not true. None of that is true. The data is just not there. Yes, you can find a paper. I don't think it's an unpublished paper. And it's, what does it even mean, a saving glut? According to research done by Professor Mian and his colleagues, real investment by the ultra rich is down by 2% to 3% over the past few decades. So even though billionaires have been earning a lot more compared to everyone else, they haven't been reinvesting that cash. I wonder, and by the way they're showing houses and stuff as if that's where the cash is going. I'd love to see the data on that. I'd love to see how they draw those conclusions, what they count as investments. In fact, the top 1% saves an average of 50 cents for every dollar of disposable income they receive. And that's not good for the economy. So if, wait a minute, they just told us they don't invest. And then they tell us they save 50% of every dollar they bring in. What does saving mean? 50 cents on every dollar. What does saving mean? Does it mean putting it all into a vault? It doesn't mean having cash? Does it mean buying gold and stuffing it in the ground? What does saving mean? Doesn't saving mean investing? Isn't that what it is? You put it in the bank, the bank lends it out, you buy stocks, that's a form of investment. How are they defining investment? If they are not equating, it was saving. And the fact that the wealthy are saving 50% of their income, that means that it's bad for the economy? How is it bad for the economy? Well, because they're not consuming. An important part of the economy is not consuming. That money is not going into investment. So wouldn't it be great if the billion is just bought more yachts? That's it. They need to consume more. Buy more suits, buy more yachts, buy more airplanes, buy more cars, then the economy would be better off. I mean, this is mind-bogglingly stupid. Consumption does not drive the economy. This is so basic. Now I know the problem with this point is that almost everybody thinks that consumption drives the economy. But how can that be? When every act of consumption requires somebody to produce so that you have the money to consume. So there's an act of production that has to precede the act of consumption. One. And then there's another act of production that has to occur. Somebody has to produce the good that you consume. So for every dollar you consume, you had to produce it, production. And somebody had to produce the good that you're spending the dollar on, production. There are two acts of production for every act of consumption. Now there are many, many more acts of production if you take into account the entire supply chain. But I'm just talking in the most simple sense. It just makes, I mean, if you run that idea in a Robinson Caruso type economy with very few players, you see the absurdity of it. And of course it's going into investment. By the way, I love that yacht. I want one of those. Hmm. Maybe I should have gone into finance after all because I'm certainly not going to get one of those yachts in the super chat. Not today. Maybe last super chat, but not this super chat. No yacht for me. I mean, this is what I do because the knowledge of economics of people is so mind-bogglingly. Is that a word? Stupid? That will ultimately lead to a shrinking or a smaller economy than before. What leads the smaller economy than before is lack of investment. That's absolutely right. But when you take money from the rich and you give it to the poor, they don't invest. What do poor people do with the money? Right? What do they do with the money? They're consumer. They don't invest it. The only people who invest their money, the only people who invest the money are the rich and saving those equal investment. Mark says it's encouraging to see you enraged by these absurd takes in economics. I've been doing this for, since I, you know, for 12 years I've been enraged by this. There's nothing, I don't know why it's suddenly encouraging. Rich people invest. They don't necessarily have to create new resources. They don't need to necessarily just build new factories. They can use that money to buy the existing houses. They can- What? What? They don't build the factories. True. They invest in people who do. But the idea that the rich just buy more houses, yeah, some rich people have a lot of houses, but it's a fraction of their wealth is held in houses. Their real wealth is all invested. Buying stocks in the stock market is an investment. Holding stocks of Amazon is an investment that leads to Amazon having the capital ultimately to build factories, to build warehouses, to grow its business. Where do these companies get that money from? From people who invest. Who invests? The rich, because they're the only ones who have the money to invest. The middle class and up. Poor people don't invest. They consume. It's waste. Actually, we should read it, if we cared, if we were your charlatarians, and we cared about economic growth, we would do massive redistribution of wealth from the poor to the rich. It's wasted in the poor. Money. Because they just consume it. What we really want is investment. That produces really economic growth. You can use that money to drive you and your government into debt, and that doesn't lead to investment, what it does. How does, how does, there's another, you know, he's an economist. Remember, they promised us data. How does the rich, how do the rich drive the government into debt? I think the government drives the government into debt and redistribution of wealth drives the government into debt. And that's what slows the economy as well. Rich people cause you to default on your home. Rich people do that. God. To is the impoverishment of the middle class. But how can you say that? But the reality is the middle class has actually gotten richer. If you look at statistics, the middle class is shrinking because of a significant proportion of the middle class has become rich. There's a middle class is smaller today now because a bunch of middle class people became poor. Some did a little bit. But mostly because middle class people became rich. The number of people who are considered rich by income. I don't know, making more than 250,000 a year, making more than 150,000 a year. I don't know how you want to measure that has grown dramatically in real terms. When high profile billionaires are behind some of the largest employers in the country, don't billionaires create new jobs? That is when they aren't laying off workers like Amazon, Twitter and Facebook just. This is why it magazine, right? How does the fact that they're laying off people now contradict the fact that they created the jobs? How is that logically one follow from the other? I mean, and this is logic 101. They have no, these people who ever wrote the script really doesn't have a clue. The billionaires, they own the corporations, they own the land. So of course they get to control who works or not. The very rich, while they are saving a lot, those savings are not going into new business creation. Notice that now they're saying, for some reason, now we said that the saving along. But what what is the saving going into that saving is not creating new jobs? What is it? There has been this slowdown in business creation. Yeah, because of regulation, because of massive increases in regulation that slows down new business. Down in sort of more competition in the economy. That slowdown in competition from smaller businesses. Where's the saving going to? He still hasn't explained that. This saving, but it's not going into new businesses. Where's it going to? Doesn't necessarily mean that larger companies like Walmart or Amazon will increase their workforces as they become more dominant. Doesn't it? Have you have you actually read the numbers and how many people Amazon employs? And here's the here they go to the old trade fallacy. Increasingly, a big part of the thing they own is technology that increasingly, because of what's amazing, they don't even need that many workers. Isn't it interesting that unemployment in the United States is at the lowest it's ever been in history? Even under Biden? Isn't that amazing? And yet we keep adding robots and unemployment keeps going down. The Luddites are, you know, it's incredible that Luddites are giving credibility by why it. They don't need human workers because they're replacing them with robots. By some estimates, he thinks he's so smart, too. Automation is on track to eliminate close to 20 million jobs worldwide in manufacturing by 2030. But is that a bad thing? How many how many jobs did automation eliminate in farming over the last 200 years? More than 20 million, I'm sure. But isn't that a good thing? Aren't billionaires like Jeff Bezos, Bill Gates, George Soros and Michael Bloomberg making up for it by giving away tons of wealth? Making up for it. They did this horrible stuff. Value is created. Value is not, value can be transferred, but value is created out of thin air. The value I get from an iPhone is created out of thin air. Value is not, there's not a zero sum. I paid $1,000 for this. This is worth immeasurably more than $1,000 to me because of what it allows me to do that I could not do before that. That's real value creation. Through charity? Whatever they do. So they have to compensate for all the bad stuff they did in the creating of values through charity. But even here, they don't get a break. They report on their tax returns. So based on all of that data, we know that even after they give for philanthropy, they are saving a lot more. He should obviously ignore. So they're saving a lot more. Now, I don't know. This guy was a trader, he says. You think he'd be a little smart, that is, know a little bit about tax laws? I mean, if you give $100 to charity, you don't save $100 of taxes. You say, depending on your tax marginal tax rate, you save at the margin $37 at the federal level, maybe a little some on the state level. But what are they talking about? And notice he was cutting the middle. He's implying that everything they give to charity is reduced from their taxes, which is just a blatant lie. Just bold face lie has nothing to do with reality. And again, this isn't, I don't know, some Marxist magazine. This isn't some left wing thing. This is technology magazine. This is this is anyone who gives money for philanthropic reasons, but it's not large enough to actually negate the negative effects of extreme inequality, which you haven't explained what those negative effects are. And yeah, it's, it's, it's, yeah, it's not large enough to even come close to the huge, huge benefit that these billionaires have on mankind through their profit seeking activity. Also worth looking seriously into actually how they give the charity. And I think in many cases, these guys give the charities, which they own. In the case of Patagonia, what does that mean that they own the $3 billion company was transferred to a specially designed trust overseen by the Shenard family. Moves like this could be seen as a tactic to perpetuate wealth and avoid taxes. But the Shenard family doesn't have access to that money. They can't live off of that money. They can't buy homes of that money. The money is dedicated. They run it. They decide which foundations and which organizations get it. But God, I mean, this is the point. It doesn't matter what you do. They will hate you. Doesn't matter what you do. They will hate you. Often only a small percentage of certain charities operating budget is actually given directly away for land to be charities. Fantastic. Well done. If you do it, it is not going to prevent this economy from going on the edge of the cliff. That is absolutely right. That is absolutely right. We should these billionaires just stop giving to charity and actually invest in this economy. Maybe maybe then it won't go off the cliff. Anything that can do that is serious reformation of the tax system. Yeah. So if we raise taxes to 60, 70, 80 percent, that's how we'll fix this economy. But some billionaires like Elon Musk famously complained that the government already takes too much in taxes. They do. It's actually not true that the very rich pay a lot as a fraction of their income in taxes. They pay a huge amount. They double taxed on their capital gains. They pay on their dividends. They pay on the income to the extent that they take income. They are hugely taxed and it's cheating because people don't count the capital, the corporate tax. So when Warren Buffett says, I don't pay a lot of taxes, it doesn't include what Bookshare Hathaway pays. But that's his money. He owns Bookshare Hathaway, a big chunk of it. That's part of his tax rate. It is remarkable how flat a tax system the U.S. has. The United States has the most progressive tax system in the world, certainly when it comes to income. Not the most, one of the most progressive tax systems in the world. All right. I've had enough of these guys. Hopefully you guys have too. But that gives you a sense of, and this is the problem. I've noted this in the past with regard to other stuff. The problem is that they say stuff like this. And a lot of people just go, yeah, yeah, that makes sense. And it becomes part of the cultural norm. It's just because part of the culture. Yeah. We know this. That's true. Billionaires do this. Billionaires do that. Tax system is unfair. Tax system does this tax. And nobody challenges it. Nobody challenges this. Nobody questions it. Nobody presents the alternative. And therefore this becomes just part of reality. Part of the world. It's what I told you about the history of the last 40 years. These people wrote the history of the last 40 years, economic history of the last 40 years. It's not the free market, guys. It's not people who actually understand economics and finance and the way the world works. No, it's these, I don't know, ignorant leftists who have written the history. And it's basically become the way people understand the world, the way people understand reality. Inequality is bad. How do people know inequality is bad? How many people can explain why inequality is bad? But it's something nobody questions. I'm like the only guy. Even on the free market side, people succumb to these things. But I'm the only guy who says, no, no, no, there's nothing wrong with inequality. Thank you for listening or watching the Iran book show. If you'd like to support the show, we make it as easy as possible for you to trade with me. You get value from listening. You get value from watching. Show your appreciation. 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