Let’s be honest, folks.
My bank account is hurting compared with what it was two months ago. Some of my neighbors and relatives are telling me they are hurting right now.
My Facebook friends are worried that their businesses could go bankrupt because they don’t have any money coming in.
Many folks are blaming COVID-19. Some are blaming Gov. Roy Cooper.
Let’s make one point loud and clear so the folks in the back can hear it, too: the cash didn’t disappear.
I repeat, there is money in this country — it just isn’t in the hands of you and me.
You ever take chemistry class in high school? Mr. Ferguson taught us at North Surry that there is no matter added or lost through chemistry. If you take a couple of hydrogen atoms and combine them with an oxygen atom, you get a water molecule. You don’t add or lose any matter. It’s all still there; it just changed a bit.
The same thing applies to wealth. Aside from the awful trade deficit which sees us spending more on imports than we gain from exports, the amount of money in this country stays roughly the same from month to month.
If you are broke and all your friends are broke, then it means somebody else is laughing all the way to the bank. That’s just common sense.
So where is all that money going? That’s a very good question. I could guess, but I’ll defer to Forbes magazine’s article earlier this week.
Twenty of the richest people on Forbes’ list of the world’s billionaires have seen their net worth skyrocket a quarter of a trillion dollars in the past two months. That’s right, $255 billion more than they already were worth when the stock market took a hit on March 23.
With 7 billion people on this planet, that’s like every man, woman, senior citizen and infant pulled out about three and a half dollars to give these billionaires in a time of crisis — and this is just their stock holdings.
The CEO of Facebook, Mark Zuckerberg, saw the biggest gains of anyone as shares of his company’s stocks surged almost 60% in the past two months. According to Forbes, the 36-year-old has jumped from #7 to #4 on the list of the world’s richest at $86.5 billion, passing investment guru Warren Buffett and Oracle cofounder Larry Ellison.
Jeff Bezos, the founder and CEO of Amazon, was already the world’s richest man before brick-and-mortar stores were shuttered and folks were forced to shop online to find what they needed. His net worth has jumped $30 billion since March 23 — increased $30 billion — to $146.9 billion.
That’s 30,000 millionaires’ worth. Or if you were doing the McDonald’s Monopoly game, you could give away a $50,000 prize to 600,000 different winners. And this is all going to one man.
Bezos isn’t the only online retailer making a killing. Colin Zheng Huang is the founder of Pinduoduo, the second-largest online marketplace in China (behind Alibaba). In the past two months his net worth has more than doubled. He went from a net worth of about $17.7 billion to an increase of $17.9 billion, so he is now worth $35.6 billion and is the third-richest person in China.
Not a single company in the top 25 of the S&P 100 stock listings has had a decline since March 23.
Sam Walton’s three heirs to the Walmart fortune (Jim, Alice and Robert Walton) are now worth close to $165 billion combined.
Remember, the Forbes article was only talking about stock holdings. This doesn’t include folks making enough profit to buy private companies that aren’t traded on Wall Street, or land and real estate purchases.
The rich are expanding their wealth while 39 million Americans have filed for unemployment claims.
When the governor passes an executive order closing businesses, it is easy to get angry at one man. However, don’t forget that all 50 states were passing some kind of rules to protect themselves from the virus, so North Carolina wasn’t getting singled out. There were Democratic and Republican governors alike making these calls.
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So if the poor are getting poorer and the rich are getting richer, is there someone or something where we can point the finger of blame?
How about the 2017 tax law?
It slashed the corporate tax rate from 35% to 21% in a move that the president called “rocket fuel” for the economy. He said that the loss of tax income from these corporate sources would be made up by the boost in the nation’s overall economic growth.
According to a report from BusinessInsider.com, that difference has not come to pass. Corporations got a huge tax cut, and the country as a whole has nothing to show for it.
From the time of the tax law’s passing to the end of 2019, corporate tax revenues were down 23%. And the Congressional Budget Office projected that the changes would widen the deficit by $1.9 trillion over a decade.
The president said the gross national product would shoot up 6% a year because of more corporate revenue, and his own aides said it conservatively would be 3% a year.
Information from the federal government showed that capital expenditures did shoot up at the start of 2018, but have since fallen off and are even lower than they were before the tax law was passed.
The reason for this seems pretty obvious: greed.
Yes, the first year companies were willing to spend some of that tax savings. Maybe they needed new computer equipment or their company fleet of cars was old, so the board of directors gave the okay to make some purchases. Money was reinvested back in the company.
Then what happened with the tax savings in 2019? It didn’t go back in the national economy. It went into someone’s pocket — or a whole lot of someone’s pockets. The tax savings might have been reinvested in 2018, but dividends were more likely in 2019 and probably will be again in 2020.
This is why trickle-down economics fails. Too many people high up the food chain gobble up all the food and don’t leave any crumbs to trickle down to the little guys.
Why does Jeff Bezos need to be worth $147 billion? What could a single person even spend that much money on?
If the Walton trio are worth $165 billion, why can’t I get a cashier to ring up my items at checkout? Why do they have to cut American jobs to make even more money with self-checkout?
When the November elections roll around, remember it wasn’t Gov. Cooper who gave massive tax cuts to big business. It was President Trump.
Source: https://www.mtairynews.com
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