Review: The Trouble with Billionaires
How much is a billion dollars?
For most of us, that number is more than we can imagine, so Linda McQuaig and Neil Brooks have made it simple. If you were given a dollar every second, it would take almost 32 YEARS to become a billionaire.
And, if you are Bill Gates counting your fortune of $53 billion, you would be finished by now if you started counting in the year AD 330 – when Constantine was the Roman emperor. McQuaig and Brooks have put together a compelling picture of the real cost of the growing global inequality that has produced a record crop of billionaires – 1,011 at last count.
What the authors demonstrate is that, while the effects of the increasing gap between the ultra-rich and everyone else is deleterious to the economy as a whole,to the environment, and even to our health, “the issue of inequality and its consequences has largely disappeared from the public debate.”
They begin by providing examples of the absurdity of the situation. For instance, the former CEO of Merrill Lynch defended giving $4 billion in executive bonuses in 2009 as necessary to retain the “best” advisors. This was done “right after these same over-achievers had steered the company to a staggering net loss of $27 billion and in the process helped trigger the global economic meltdown.”
All in all, Wall Street bankers paid themselves a record $140 billion in 2009.
To put this into perspective, the twenty-five top hedge fund managers in 2009 “earned” an average of more than a billion dollars each – “more than 24,000 times that of the average American.”
But not to worry – these high-rollers are entitled to their fortunes because, in the words of Goldman Sachs CEO, Lloyd Blankfein, they are just “doing God’s work.”
McQuaig and Brooks explain why the existence of such extreme wealth is far from benign. One problem is the extent to which such disparities are anti-democratic. Concentrations of economic power translate into concentrations of political power. The ways in which the wealthy few can undermine a democracy are legion, such as its control of the mass media, and by “contributions” to political parties that support their interests (such as McDonalds donating to parties who oppose raising the minimum wage).
Then there’s the billionaire Koch brothers, whose oil wealth has been a principle support of the “Tea Party” in the U.S. Not only do they advocate even lower taxes on the rich, but they oppose legislation to reduce global warming in their pursuit of higher profits.
One of the worst aspects of inequality is its negative effect on the health of those who are not well-off. McQuaig and Brooks point out that “height is a good indicator of how well a society is creating conditions that allow its citizens to develop and thrive.” By this measure, almost every nationality in the developed world, “French, Italian, Spanish, Japanese, Greek, Canadian, Singaporean, Swiss, Brazilian” is healthier than the average American. (A recent study of life expectancy supports this conclusion, showing that the United States has dropped to 45th place in terms of life expectancy).
The authors demolish the arguments that are put forward to attempt to justify the fortunes paid to the elites, and they make a very powerful case that progressives need to focus their attention on inequality in general, rather than poverty in particular.
Their recommendations for a progressive tax system should be heeded by all Canadians.