Defenders of the out-of-control wealth gap insist that all is OK, because, after all, America is a ‘meritocracy’ in which the super-wealthy have ‘earned’ all they have. They heed the words of Warren Buffett: “The genius of the American economy, our emphasis on a meritocracy and a market system and a rule of law has enabled generation after generation to live better than their parents did”.
But it’s not a meritocracy. Children are no longer living better than their parents did. In the eight years since the recession the Wilshire Total Market valuation has more than TRIPLED, rising from a little over $8 trillion to nearly $25 trillion. The great majority of it has gone to the very richest Americans. In 2016 alone, the richest 1 percent effectively shifted nearly $4 trillion in wealth away from the rest of the nation to themselves, with nearly half of the wealth transfer ($1.94 trillion) coming from the nation’s poorest 90 percent – the middle and lower classes. That’s over $17,000 in housing and savings per lower-to-middle-class household lost to the super-rich.
A meritocracy? Bill Gates, Mark Zuckerberg, and Jeff Bezos have done little that wouldn’t have happened anyway. ALL modern US technology started with – and to a great extent continues with – our tax dollars and our research institutes and our subsidies to corporations.
In 1975, at the age of 20, Bill Gates founded Microsoft with high school buddy Paul Allen. At the time Gary Kildall’s CP/M operating system was the industry standard. Even Gates’ company used it. But Kildall was an innovator, not a businessman, and when IBM came calling for an OS for the new IBM PC, his delays drove the big mainframe company to Gates. Even though the newly established Microsoft company couldn’t fill IBM’s needs, Gates and Allen saw an opportunity, and so they hurriedly bought the rights to another local company’s OS – which was based on Kildall’s CP/M system. Kildall wanted to sue, but intellectual property law for software had not yet been established. Kildall was a maker who got taken.
So Bill Gates took from others to become the richest man in the world. And now, because of his great wealth and the meritocracy myth, many people look to him for solutions in vital areas of human need, such as educationand global food production.
Gates on Education: He has promoted galvanic skin response monitors to measure the biological reactions of students, and the videotaping of teachers to evaluate their performances. About schools he said, “The best results have come in cities where the mayor is in charge of the school system. So you have one executive, and the school board isn’t as powerful”.
Warren Buffett has advocated for higher taxes on the rich and a reasonable estate tax. But his company Berkshire Hathaway has used ‘hypothetical amounts’ to ‘pay’ its taxes while actually deferring $77 billion in real taxes.
Since the end of 2015 Jeff Bezos has accumulated enough wealth to cover the entire $50 billion US. housing budget, which serves five million Americans. Bezos, who has profited greatly from the Internet and the infrastructure built up over many years by many people with many of our tax dollars, has used tax havens and high-priced lobbyists to avoid the taxes owed by his company.
While Zuckerberg was developing his version of social networking at Harvard, Columbia University students Adam Goldberg and Wayne Ting built a system called Campus Network, which was much more sophisticated than the early versions of Facebook. But Zuckerberg had the Harvard name and better financial support. It was also alleged that Zuckerberg hacked into competitors’ computers to compromise user data.
Now with his billions he has created a ‘charitable’ foundation, which in reality is a tax-exempt limited liability company, leaving him free to make political donations or sell his holdings, all without paying taxes.
This article has been excerpted from: ‘Now Just Five Men Own Almost as Much Wealth as Half the World’s Population’.