What do wealthy people do with their money? They can only buy so many cars, houses, and steak dinners. So we either give it away or invest it. What the “supposed 99 percent” don’t realize is that they are better off if there are more fat cats, not less.
David Koch gave $100 million for cancer research at MIT. Bill Gates gave more than $28 billion to promote global health, saving 5.8 million lives in Africa alone. Facebook’s Mark Zuckerberg gave $100 million to revitalize public education in New Jersey. Go to Cleveland Clinic, Mayo Clinic, or any college and you’ll see libraries, dormitories, and a lot of buildings that were a result of the generosity of fat cats.
Amazon’s Jeff Bezos, Facebook’s Mark Zuckerberg, Bill Gates, and Steve Jobs did not start out wealthy and actually added to income inequality, but we all benefit from their creative effort. They demonstrate that social mobility is a more important goal. Wealth is the ultimate panacea to poverty.
Our society would be a lot better off if everybody’s tax rates were lowered. Yet the rich people I know would be willing to pay more in taxes if they felt that it was good for our country.
The trouble is not just that it enlarges government; it also creates divisiveness. For example, if you want to buy a Cadillac and I want to buy a Ford, we go to our respective dealers and we’re both happy. But if the government starts issuing automobiles, suddenly you and I become political enemies over how we position our favorite car. We have so many government activities that divide us. If it were left to the private sector, people would not have those animosities.
Here are some other reasons why American taxpayers aren’t eager to feed the beast: $700,000 was sent to Thailand to discern if pig flatulence could be used as a renewable energy source; $500,000 was allocated to study shrimp on a treadmill; $1.9 million sent to China to study the drinking habits of prostitutes on the job! One million dollars to spread poetry in America’s zoos and $55 million to improve infant mortality—in Jakarta, Indonesia!
More recently, President Obama forgave a $1 billion loan to Egypt. How smart does this look now—especially when our embassy in Cairo is under siege and even Obama is forced to admit that Egypt isn’t our ally? The new Egyptian government, headed by the Muslim Brotherhood that our spurned friend, Hosni Mubarak, had previously outlawed, has become far less favorable to the United States, and the even more fundamentalist Salafis are on the rise—all of which doesn’t bode well for our reliable ally Israel.
And we have plenty of problems at home. The collusion of big business, big labor, and big government threaten the spirit of small business that makes America great. Success should stem from entrepreneurial creativity, not political connectivity. The Daily Caller (which I back financially) revealed that somehow, of all the Obamacare waivers issued in April 2011, there was one congressional district that received 20 percent of those waivers: Nancy Pelosi’s. It’s stories like these that irk Tea Partiers, Occupiers, and everyday taxpayers.
But let’s say you and I owned a cookie factory and we’re going gangbusters. Suddenly, the cookies, for whatever reason, stop selling. We have to rent a warehouse to store them. Would it make sense for us to get a government loan to buy new cookie machines?
What I’ve seen in my investment career is that when various bubbles burst, whether it’s the overbuilding of nursing homes and hospitals, or expansion of any industry, the solution has always been to try to absorb the excess inventory rather than expanding capacity. Encouraging more home-building when excess capacity exists isn’t the greatest idea. Spending on new bridges to replace crumbling ones is a more savvy idea.
While agonizing for existing homeowners, it does enable people living in apartments to scoop up bargains. After all, it has been a longtime goal of government to have “affordable housing,” but then when suddenly houses become more affordable, government policies try to pump the prices back up. We need to trust the free market over counterproductive government policies.
Foster Friess, an original Santorum supporter, launched his money-management career in 1974 with $800 in personal savings.