The Trouble With Billionaires [Hardcover]

 

 

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The back of this book lists an interesting fact. If you made a dollar per second, every second, you'd be a millionaire in 11.5 days. At that same rate ($3600 per hour) it would take you 32 YEARS to become a billionaire! If Bill Gates had made his fortune at that rate, he would have had to start 1,600 years ago! What this means in practice is that billionaires represent a form of wealth beyond the experience, or even comprehension, of most people. McQuaig and Brooks argue in this book that these extreme cases of wealth are harmful in a variety of ways.

Their first argument is that billionaires contributed to both the Great Depression as well as the recent depression. In a nutshell, when money leaves the hands of the middle class for the extreme rich, there is less money for general spending (run the example in reverse- you'd have to spend $3600 per hour for 32 years to run out of $1,000,000,000!!!) and more for investing (they can't spend it, so they invest it). That money led to inflated bubbles and riskier investments, leading ultimately to market crashes. Trickle down economics doesn't work (91% of the wealth created in the last two decades in the US went to the top 10%).

Their second argument is that huge disparities in wealth lead to health problems. This is becoming a well-established fact in social studies. Income disparity appears to be the best predictor of violent homicides. It also predicts general health. In a fascinating (and I think very intuitively powerful) example, the average height of Americans (who have the greatest inequality of any "modern" country by a long-shot) is growing slower than the height of Europeans, even controlling for immigrants. The inequality gap caused by ultra-billionaires is making Americans relatively shorter than Europeans!

Their third argument is perhaps their most damning, and one that I found most compelling. It should come to no surprise that the rich use their wealth to help themselves politically. Buying politicians is nothing new, it's just a lot easier when you are mega-rich. It's a vicious cycle in that the ultra-rich push for new laws and loopholes that allow them to become even more rich, allowing them to push harder, making them richer, etc. Ultra-rich billionaires represent a very real threat to democracy as their voices are heard much louder and more clearly than the average citizen's. Personally, and I suspect like many readers, I think that's natural (if not deserved). What's troubling is that the process reinforces itself. So it's not like politicians listen more to billionaires than Joe the Plumber. It's that they listen more, and more, and MORE to the billionaires and less, and less, and LESS to Joe the Plumber. I for one am shocked at how lightly the banks got off in the US after triggering a global financial crisis, and the anger in the recent US elections suggest I'm not the only one who thinks that. For another example, I first noticed when I started investing myself, advanced lucrative investments that were limited (by law in Canada and the US) to "accredited" investors. Initially, I thought that meant educated or some kind of certification. It doesn't. It means wealthy. The rich have created investments that only they can invest in.

The authors' solution is fairly simple- restore higher levels of income tax for the ultra-rich. This is the easiest way to redistribute wealth. The authors argue that much of a billionaire's wealth is due to luck and society, so why shouldn't some of it come back? If billionaires threaten to leave, up the threat by threatening to remove their foreign tax havens.

The bottom line is why this very interesting book only gets four stars. The authors' solution to raise income taxes is an obvious and strong choice, but the problem is how do you implement it? Just ask your local politician? What's needed is for some kind of a movement to begin, and the authors offer no advice to this regard. What's also needed are mountains of cold, hard facts and figures that are easy to understand and powerful motivators (like the initial math at the start of this review). I'd like to see more data- especially more Canadian data. We know that special interest groups are great at twisting facts and figures to suit their needs, so a book like this, an argument like this, a cause like this, needs serious factual support to motivate the public to motivate the politicians to make the right changes because you can bet that (some of) the billionaires are going to fight back, and they've got a lot of resources to bring to that fight. I have no problems with people honestly and legally earning large sums of money, but the "game" shouldn't be rigged so that the rich can unfairly keep getting richer at the expense of everyone else.

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"As a result of the increasing concentration of income and wealth at the top during the last few decades, the United States, Britain, and Canada have become extremely unequal societies...What exists today in the Anglo-American countries is an excessive level of inequality that has rarely been seen in modern history...

In the past few decades the middle and lower classes have experienced almost no growth in income. Virtually all the income growth has been at the top, particularly at the very top. The top-earning 1 percent of Americans now enjoy a whopping 24 percent of the national income. These high rollers make up an enormously rich and powerful class that can be described as a plutocracy."

The above is found in this fascinating and tremendously informative book by Linda McQuaig and Neil Brooks. McQuaig is a columnist for the Toronto Star newspaper and author while Brooks is a professor of tax law at Osgoode Hall Law School in Toronto.

Contrary to the title of this book and as can be garnered from the quotation that begins this review, this book is about income inequality with billionaires being at the extreme of this inequality.

When I first picked up this book, I thought it was going to be one long diatribe against billionaires, a diatribe driven by jealousy and envy. Nothing could be further from the truth. This book delves into history and critically analyses recent events. It looks into the myths, misconceptions, and realities that inundate the capitalistic economic system. Above all, it makes reasoned, rational arguments.

Finally, here are some of the provocative chapter titles found in this revealing book:

(1) Return of the plutocrats (A plutocrat is a person whose wealth is a source of control or great influence)
(2) Why pornography is the only true free market
(3) Billionaires and the (financial) crash of 2008
(4) Why Bill Gates doesn't deserve his fortune
(5) Why other billionaires are even less deserving
(6) Hank Aaron and the myths about motivation
(7) Why billionaires are bad for your health
(8) Why billionaires are bad for democracy

In conclusion, this is truly a riveting book. It raises questions about who gets rich and why, and in the process raises profound questions about what kind of society we ultimately want. I leave you with this book's last paragraph:

"The American Dream...has always been more myth than reality. As it sadly fades further into mythology...Canada could emerge with an exciting new version--one that puts real heft behind the notion that society is a community and the everyone in the community should have a chance to live their dreams."

(first published 2010; 12 chapters; main narrative 245 pages; notes; acknowledgements; index)

<<Stephen Pletko, London, Ontario, Canada>>

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Clearly and convincingly makes the case for the problems with the growing inequality in the world but particularly in the US, Canada and UK. The very rich have as much to fear from this issue as the poor in the long run but their short term vision may make them not take any steps to help correct things.
I recommend this book to anyone with an open mind.

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5.0 out of 5 stars Thoughtful
Highly recommended. This book focusses on whether rich people deserve their riches or are just entitled to them, and whether they owe society more for their riches, and whether... Read more

Published 4 months ago by G. MCKENNA

5.0 out of 5 stars Living Standards

This is a well researched & written book & I highly recommend it if you are interested
in our standard of living. Read more

Published 6 months ago by Seven Seas

5.0 out of 5 stars Great book
This book is amazing. It takes the mythology of neo-conservatism and blows it apart with the hard truth about the wealthy and their quest to hoard it for themselves like greedy... Read more

Published 7 months ago by Sandra

5.0 out of 5 stars All voters need to read this book
I read this book in a single session, which I rarely do with any book.
It is an easy read, with many illuminating analogies to help bring attention to some important facts... Read more

Published 7 months ago by Eric Lawton

5.0 out of 5 stars A very well written book with a compelling argument
The other review is a little too harsh (the long one). Implementing changes in society that will eliminate the existence of billionaires requires a book in itself. Read more

Published 14 months ago by anonymous

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