Tuesday, November 5, 2013

Scrooge McDuck's money...

PIMCO's Bill Gross calls America's rich "Scrooge McDucks" and says their taxes should be raised. He's frustrated that "gazillionaires" have been sitting on their gains as opposed to investing in the real economy for the past "five, ten, fifteen years" (I certainly agree with five) and, therefore---for the sake of the average person---should pay higher taxes to fund infrastructure projects. Also, per a CNBC interview that I watched last week, Gross and his wife, reported billionaires, have plans to give their entire fortune to charity over the course of their remaining lifetimes. He clearly puts his money where his mouth is.

I have no problem whatsoever with the latter. If Mr. and Mrs. Gross wish to give their fortune to the less fortunate, that is absolutely their business, not mine. I just wish Mr. Gross---for the sake of the very folks he and Mrs. Gross wish to help---would stay out of the business of his fellow billionaires. I happen to believe that the less fortunate are far better off when capital is allocated to its most productive use. Comparing the productivity of assets when employed by private sector versus public sector actors, is like, well, comparing the productivity of the private sector to that of the public sector.

As Milton Friedman pointed out (below), poverty is mostly the result of failures of government. I would add that the lack of "real economy" investment over the past few years is the result of government failure as well---specifically, the result of government policy-induced uncertainty.

Here's Milton Friedman on gazillionaire investing, poverty, and the perniciousness of minimum wage legislation:

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