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OpEdNews Op Eds    H1'ed 11/21/22

Are Billions wasted by Billionaires?

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Many Crypto-billionaires fell off the billionaires list this year, including Bankman-Fried mentioned at the end of this video, who may face jail time too.
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The article in the New York Times: This Week, Billionaires Made a Strong Case for Abolishing Themselves is generating a lot of buzz. The author, Mr. Giridharadas, is the author of "Winners Take All: The Elite Charade of Changing the World" and other books. He makes a strong case that the indulgences and governing styles of the billionaire class are neither genius, nor sustainable. Yesterday's genius entrepreneur may be today's foolish CEO leading hype companies into bankruptcy. And it turns out that popularity and influence is no substitute for intelligence and good business sense.

Elon Musk, Jeff Bezos, Sam Bankman-Fried, and of course, and always, Donald Trump, all have a history of as many failures as successes. While grit and recovering from failures are personally commendable qualities, they don't necessarily translate to the kind of persons that deserve the societal worship, or at least, outsized attention, that the billionaire class has received.

The author forgot one important example: Elizabeth Holmes, the ex-CEO of the ex-company, Theranos - a company that purported to be able to diagnose a variety of conditions from just a few drops of blood, potentially saving millions of dollars and time and discomfort from millions of patients, but which was really just a fraud using traditional diagnostic companies with questionable test results. It's interesting that the only harsh penalty in this expanded list goes to Holmes, who defrauded people even richer than she was (up to $9b at the peak).

She got 11 years in prison.

We all got to see serial fraudster and corporate-bankruptor make a serious run for president, again. Trump might even win again, proving there is no limit to the ability of some people to fail upward.

Self-proclaimed "Chief Twit" Elon Musk might well lose a significant chunk of his fortune on Twitter, though other investors collectively may lose more - and maybe they will gang up on the world's richest man (though maybe not for long, given that Tesla's stock price has been cut in half and is still going down, partly due to the perception that its founder is distracted by the dumpster fire disaster from purchasing Twitter).

Maybe Holmes fate is just a later chapter that awaits some of the rest of this self-disgraced crew, but only if they've lost fellow plutocrats their investments. Victimization by fraud is for the Little People. It should be noted, as this CNN article points out: Click Here that Holmes, who was 19 when she started her company, was probably the victim of an abusive boyfriend, now facing the same range of punishments as her, but never forced to control his eating, image, and even voice, as she was. It doesn't excuse her falsifying financial statements but she was snetenced for defrauding investors. It's interesting how the only woman on this expanded list came to her singular comeuppance along a different, perhaps uniquely female, path. Billionaires are mostly still a guy thing. Holmes is no innocent, but now, at 38, her productive life is over and that soon, even after another appeal, she'll be lucky to see freedom again at 50.

Musk's fate may be different. He famously thrives-on-stress and that may yet be enough to get out of yet another self-induced mega-crisis; maybe Twitter will even survive. But he seems to be getting increasingly erratic, mercurial, and unpredictable. He may just crash and go insane, "literally," as young people like to say.

Musk-cultism is not only an indictment of society's Mammon worship of Billionaires, but the singular example of Musk is a damning example of the terrifying dependence America is placed in this single key-man in several key technological industries: Electric cars, Battery and solar power, space travel, even tunnel-boring, among other, lesser industries. Without Musk there would probably be no commercial space industry, and maybe no way to reach the ISS except on Russian Soyez spaceships (not enough of an incentive to prevent the Russia-Ukraine war, in either scenario, unfortunately). There might be only a nascent electric car market, mostly for hobbyists, or maybe yet another industry taken over and made profitable by China. Losing the Twitter national town square to Musk's mistakes would be the least of our problems compared to losing those industries.

The crypto-crash is just starting and no one yet knows how deep or how expensive it will be yet. Again, unless billionaire investors are hurt, no one will probably pay more than from flaming out like Bankman-Fried and his incestuous gang (Gary Gensler, Biden's head of the SEC, is part of the surprisingly tight circle of Relateds connected to FTX, and arguably conflicted-of-interest). As of this writing, even the largest of thousands of cryptocurrencies, Bitcoin, is flirting with 2-year lows. The other cryptocurrencies will certainly be severely winnowed out; they aren't call "sh*t-coins" for no reason.

Productivity growth has nothing to do with the percentage of billionaires. There may even be an inverse relationship since most billionaires are also rent-seekers, getting wealthy not just through innovation, if at all, but mostly through monopoly and the patent system. Economist Dean Baker has said Bill Gates would still be working for a living if not for patent rights over Windows and other Microsoft products while he was CEO. That may be an exaggeration, but as Thomas Pickety points out in his seminal tome: Capital, when the rent-seeking class increases its power, innovation decreases and economic growth slows. Billionaires don't want innovation, or at least not innovation that isn't from them. That is competition, and that stifles their ability to make money. Carried to its logical conclusion, this means tax cuts for the wealthy actually reduce competition, economic growth, and productivity. Productivity is further reduced by various gambling industries that add nothing to society, but which do produce a nation of habitual risk-takers, many of whom will go bankrupt.

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Scott Baker is a Managing Editor & The Economics Editor at Opednews, and a former blogger for Huffington Post, Daily Kos, and Global Economic Intersection.

His anthology of updated Opednews articles "America is Not Broke" was published by Tayen Lane Publishing (March, 2015) and may be found here:
http://www.americaisnotbroke.net/

Scott is a former and current President of Common Ground-NY (http://commongroundnyc.org/), a Geoist/Georgist activist group. He has written dozens of (more...)
 

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