by How can a few people be so incredibly rich, while many people live paycheck to paycheck? Billionaires are constantly being bashed by politicians and the media. In defense of billionaires, this post will explain why we should look at billionaires as allies, rather than enemies.
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Billionaire Bashing
According to Alexandria Ocasio-Cortez, billionaires should not exist.
I don’t quite understand the logic. 99% of people can’t dunk a basketball. Does that mean the NBA shouldn’t exist?
Bernie Sanders said: “There should be no billionaires. We are going to tax their extreme wealth and invest in working people.”
Taxing wealth poses logistical problems. A vast majority wealth is locked up in assets like stocks, businesses, and real estate.
Taxing wealth also poses ethical issues. How is it fair to tax those who saved and accumulated assets, but not those who frivolously blew their money away?
Former treasurer secretary and ex-Harvard president Larry Sanders opposes the idea of a wealth tax.
Jeff Bezos
Let’s examine a few billionaire stories.
Billionaire Jeff Bezos founded Amazon. The same company that:
- Provides jobs to 575,700 employees
- Provides products and services to 150 million Amazon Prime members
- Provides a platform for 2.5 million sellers on its marketplace
- Shipped over 5 billion items worldwide through Prime in 2017
- Brought in a net income of $11.59 Billion in 2019
If Jeff Bezos made just $1 from each Amazon Prime member per year, he’d be a billionaire in 7 years.
If he made ten cents on each item sold on Amazon, he’d be a billionaire in 2 years.
He owns over 10% of Amazon stock. If he made 10% of Amazon’s net income in 2019, he would be a billionaire.
Jeff Bezos has a net worth of $182 billion. Yes, it is a staggering amount. Yes, he probably doesn’t NEED the money. In fact, he would have a difficult time spending all the money before he died. He could spend $12 million everyday for the next 40 years and not run out of money.
But there is no good reason why Billionaires should not exist. He created the business and developed a profitable business model. Who’s to say he doesn’t deserve it?
Some could argue: “But that money could go to better causes…”
I have trouble with that statement. If you worked for $40 an hour, who’s to say that money couldn’t have gone to better causes? Maybe you could survive on $30 an hour.
Bezos has donated billions of dollars to charity. More on that later.
There’s also this perception that Bezos’ money is not being utilized. That it is no different than a pile of cash sitting under his bed. Wouldn’t that money be better if deployed into the world?
Only this perception is completely inaccurate.
Most of his net worth is in Amazon stock. It’s basically an investment in Amazon. Amazon could sell more shares to raise money to fund its operations. Amazon could buy back shares to increase its equity value. Bezos is investing in Amazon.
And when Amazon does well, guess what? A lot of people do well! Amazon employees get to keep their jobs and may even get raises. When its stock price goes up, every stockholder benefits. Amazon is on the S&P 500 index, so when Amazon does well, retirement funds go up and pension funds go up. What’s not to like there?
Elon Musk
Elon Musk is the current CEO of Tesla. He’s also the founder and CEO of Space X.
Tesla global vehicle sales were 499,550 units in 2020.
If he made just $2000 per vehicle, he’d be a billionaire from just that one year of sales.
Even if he made just $1000 per vehicle, he’d likely be a billionaire from just two years of sales.
Keep in mind that these vehicles sell for $35,000 on the low end to well over $100k on the high end.
Tesla produces high quality vehicles, and the company won 5 out of 6 Kelly Blue Book awards in 2020.
It reimagined what “electric car” meant, and made it cool to drive something with reduced direct and, in many cases, lifecycle carbon emissions.
Billionaire Side Projects
In defense of billionaires, they spend their money on noble projects.
Bezos used his money to found an aerospace company, Blue Origin. Its mission is to create cheaper and more reliable space travel.
Musk founded Space X with the goal of reducing space transportation costs to enable the colonization of Mars.
Both Blue Origin and Space X could provide advancements in space travel that could benefit all of mankind.
Billionaire Philanthropy
In defense of billionaires, they spend their money on charitable causes.
Bezos’ Day One Fund made a $2 billion commitment to donate to non-profits.
He’s committed $10 billion to fight climate change.
Though Musk has “only” donated $100 million to charity so far, he pledged to eventually donate at least half of his fortune to charity. With his net worth hovering at $185 billion as of January 2021, that equates to over $90 billion.
How many of us have pledged to donate half of our fortune to charity?
Why Are We Not Thanking Billionaires Instead?
Here we have two examples.
Jeff Bezos created a company that provides thousands of jobs, goods to millions of people at affordable prices, and boosts the stock market at the benefit of shareholders including pension funds and retirement accounts.
He’s embarked on space travel projects that could benefit all humans, and pledged billions to non-profit organizations and more billions to fight climate change.
Elon Musk is on the same level. He made electric vehicles sexy, all while enticing people to get into vehicles that produce less carbon emissions.
Both men have and will continue to donate billions to charity.
And here we have politicians saying they shouldn’t exist? That they are not worthy of what they created? That they shouldn’t benefit from the fruits of their labor?
As long as they’re not razing my home to increase space to their mega mansion like some kind of cartoon supervillain, I’m very appreciative of these billionaires. Thank you Bezos for sending me shampoo and mouthwash, and thank you Musk for providing a greener alternative to gasoline powered vehicles.
Bottom Line
I am not a billionaire. Nor do I ever intend to be.
But I get uncomfortable when people, in particular politicians, attack billionaires.
In defense of billionaires, they pay income and capital gains taxes, but somehow we need them to pay more? Not just pay more on earned income now, but on earned income they earned in the past, that was already taxed?
To me, attacking Billionaires is an attack on freedom.
People can eat as much as they want. People can speak as much as they want. But somehow people can’t earn as much as they want?
Attacking billionaires, to me, is also an attack on capitalism. The very system that gives people choice. Because of capitalism, you have a choice of what phone you want to buy. What major you want to study in college. What clothes you want to wear. You can work as few or as many hours as you want. Capitalism is freedom. Restricting wealth is restricting freedom.
Without Billionaires, there is no Tesla. There is no Apple. There is no Microsoft.
Let’s put down the pitchforks, and rather thank the billionaires for providing us products that enhance our lives. Let’s encourage them to continue to innovate and contribute to philanthropic causes.
