“He who dies with the most toys wins.” “Whoever has it, they get it. “It takes money to make money.” “Money is the root of all evil.” “The rich get richer and the poor get poorer.” All of these statements have some validity in historical context and belief. All except the part of the poor that gets poorer.
Global poverty is defined as the number of people worldwide living on less than $1.90 a day. That number has dropped by more than 50% since 1990, but still leaves 729 million people in that category, according to OurWorldInData.org. 85% of the rest of us live on less than $30 a day, and two-thirds live on less than $10 a day. These statistics are heartbreaking, but I hope they make you feel happy.
It always amazes me how people hold diametrically opposed opinions about cause and effect when it comes to this kind of research. Too much government intervention in the financial market? Too little? Is there a political undertone? (Of course there is.) How big a role does good old fashioned greed play? Do we need more regulation or less? Higher or lower interest rates? Should tariffs be raised or eliminated?
I’m sure CEOs are all very nice people, but their pay has increased 1,322% since 1978, according to a 2017 report from the Institute of Policy Studies. The financial industry accounts for 4% of jobs, but generates 25% of profits in corporate America. Boy, did I choose the wrong major in college!
Here are some facts about the 2008 financial meltdown collected by ABC News reporters: Merrill Lynch lost $30.48 billion in 2008, but still paid 696 bonuses of at least $1 million. Citigroup, one of the largest recipients of government bailouts, our money, paid out $5.33 billion in employee benefits in 2008. Bank of America used $20 billion of its $45 billion bailout money to buy failing Merrill Lynch and earned $2.56 billion in 2008.
The banking industry’s toxic mortgage scheme that caused the housing bubble to burst was fueled by greed and outright fraud by financial institutions we trusted. The use of shocking financial instruments such as derivatives and credit default swaps were also to blame. We used the money we thought was safe.
I have zero understanding of such things as derivatives living in the shadowy world of finance, but I can provide this definition from the International Monetary Fund: “Financial derivatives are financial instruments linked to a particular financial instrument (like a trump?) (like a trumpet?) or indicator or commodity and through which real financial risks are independently traded in the financial markets”. I sincerely hope this clears it up for you. I won’t even try to explain credit default swaps.
Perhaps US Supreme Court Justice Louis Brandeis said it best: “The goose that lays the golden egg was considered the most valuable possession. But even more beneficial is the privilege of getting someone else’s goose egg. Investment bankers and their partners now enjoy this advantage.”
Much has been written about income and wealth inequality. The statistics are amazing. A 2017 report found that Jeff Bezos, Bill Gates and Warren Buffett have the same wealth as the bottom half of the country’s adult population (160 million people). Oxfam’s 2021 report concluded that the world’s 10 richest people own more than the total wealth of the bottom 3.1 billion people, nearly half the world’s population. Their total wealth doubled during the pandemic.
This should in no way be construed as a condemnation of their wealth or any form of judgment as to whether or not they deserve it. It’s just a fact.
Credit Suisse’s 2021 Global Wealth Report says the richest 1.1% of the world’s adults own 45.8% of total wealth, an increase of 4.8% since 2013. The bottom half of the world’s adult population owns only 1.3% of the total wealth. wealth decreased by 1.7%.
Widening wealth inequality is a critical issue of our time. It’s no wonder we yell at each other and belittle each other on social media. Our acceptance of fairness and equal access is difficult. So, we will be dishonest.
Wealth has become the only measure of success in many people’s minds. The temptation to hedge and cheat in the race for more wealth is irresistible to some. If they can monopolize assets, someone will.
Perhaps the words of Bob Dylan in the song “Masters of War” are apt:
“Let me ask you a question, is your money that good?”
Will it buy your forgiveness? Do you think this is possible?
I think you will find when your death finds its place;
All the money you earn will not bring back your soul.’
Of course, there is always the opposing view, espoused by Michael Douglas as Gordon Gekko in the film. Wall Street: “Avarice, for lack of a better word, is good. Greed is right, greed works. Greed refines, cuts and captures the essence of the evolutionary spirit. Greed in all its forms: greed for life, money, love, knowledge marked the rise of humanity.
I’m not a rich man, but I’m comfortable. Forty-five years in business can do that. I admit, I sometimes have a tendency to keep up with the Joneses. Jealousy is a human trait that we all share to some extent. But I don’t feel like someone else has to lose in order for me to win, I think that’s how our financial system works.
Money always retains its attraction. People always keep score. The biggest yacht, the most luxurious plane, the biggest mansion will remain the goal of many. And maybe it should be. The trickle-down theory of economics, which says that tax breaks and incentives for corporations and the wealthy will benefit everyone else, may be somewhat valid. But I’m sure the vast majority of us support the flow theory.
When asked why he was so sad, the rich man replied, “Because I want more.”
When asked why he was so happy, the poor man replied: “I have enough.”
One thing is clear, since one man traded another man’s life for 30 shekels of silver, greed has remained one of our most tempting and most deadly cardinal sins.
Ted Moore is a frequent letter to the editor of The Dallas Morning News.
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