No one can earn 50 million dollars honestly
William Jennings Bryan allegedly said “No one can earn a million dollars honestly.” (I was unable to discover when, exactly, he said it and in what context.)
That quote needs to be seriously updated for inflation and overall increase in wages since the time when he was alive. So let’s call it 50 million dollars.
I agree in the sense that the only way to earn that much money is through value transference rather than by the more honest value creation. Also, I think it’s rather rare that someone could earn so much wealth while playing by all the rules or by being a nice guy.
Which is why I support higher taxes on the rich, it’s just taking away money they aren’t morally entitled to in the first place.
William Jennings Bryan, a Nebraskan, represented the America of Trump supporters: economically struggling whites. Back then, blacks voted Republican. Trump has disappointed those who hoped he would be like a William Jennings Bryan. He’s pushing through standard Republican tax-breaks-for-the-rich legislation.
Steve Bannon, on the other hand, is a true populist.
Lion of the Blogosphere 
Per year? Over a lifetime? If it’s the latter are we talking about accumulated wealth or total lifetime income?
Magnavox
October 9, 2017 at 9:37 AM
Taxes really should be based on lifetime income. Although I guess you end up with a situation where people have made a lot of money, spent it all, and then have every marginal dollar taxed very highly.
Magnavox
October 9, 2017 at 9:39 AM
Why has noone else asked this basic question: does lion mean 50 million per year, 50 million in assets, or 50 million in total lifetime income?
Magnavox
October 9, 2017 at 4:16 PM
I mean whatever William Jennings Bryan meant. Certainly not making 50 million a year, just earning 50 million over any period of time.
Lion of the Blogosphere
October 9, 2017 at 4:36 PM
Bryan is such an authority that you’ll endorse it however he meant it? You know about his role in the scopes trial, don’t you?
If you think that tax rates should be based on lifetime income that would be an interesting idea to base a post around.
Magnavox
October 9, 2017 at 6:41 PM
Shows a complete lack of appreciation for the inventions that make modern life possible. This guy is estimated to have saved a billion lives:
https://en.wikipedia.org/wiki/Norman_Borlaug
If each one life is worth 5 cents, he deserves a $50 million, though I’m not sure what his net worth was. Wouldn’t be surprised if it was at least that much. You can find other examples easily.
Humanity owes its advancement to a disproportionate few, who have more claim on the wealth they create than those who think they should have it merely for existing.
Jeremy Cooper
October 9, 2017 at 9:56 AM
Another example is the owners of Wal-Mart. There are 125 million households in the United States. There was an estimate recently that the average household saves $2,500 a year thanks to Wal-Mart. If you think that statistic is unbelievable and the Walton family has saved the average family only 50 cents a year, again they deserve a lot more than $50 million.
And that’s just a retail chain, not someone who invented a whole new category of product like Amazon or the iPhone.
Jeremy Cooper
October 9, 2017 at 10:01 AM
BTW, I’m still pretty ok with higher taxes on the rich, partly on utilitarian grounds and partly because they themselves seem to want higher taxes. But I just don’t think there’s grounds to say that they don’t deserve their money.
Jeremy Cooper
October 9, 2017 at 10:02 AM
You’re ignoring the extent to which these people are making fortunes off of broad societal trends that would have happened anyway. All these billionaires themselves knew this (although many have since gone into denial about it since) since they worked like crazy making their fortune out of fear of all the competition. It’s just the wealth worshipers that can’t seem to grasp that.
Magnavox
October 9, 2017 at 10:30 AM
And your examples are pretty terrible. Walmartization of the US and runaway population growth are both terrible trends.
Magnavox
October 9, 2017 at 10:31 AM
At the 50 million level, there may be 100,000 people worldwide (based on an estimated 15 million millionaires and 2,000 billionaires).
Did all 100,000 of these people earn their money dishonestly? They earned their money a hundred different ways. Not one honest person? They are all crooks?
Dan
October 9, 2017 at 10:13 AM
Whether Norman Borlaug made the world a better place is open to debate.
Dan
October 9, 2017 at 10:15 AM
I would say there a some exceptional people who truly did earn their big money.
But CEOs who are worth billions or make 1000x times as much as an average employee?
As Lion has said, this implies they have the worth of many thousands of men and are veritable supermen which is ludicrous. It’s only through the exponential power of money that one man can become more powerful than a thousand men.
So yes, they are making money through the labor of others, value transferernce, personal connections, and things collective society/taxes provide that make what they need possible. There is no good reason exec pay should be that many multiples greater than an average worker.
Are they rich because they’re better or better because they’re richer? It’s usually the latter.
fakeemail
October 9, 2017 at 10:17 AM
CEO’s make obscene money in part because of passive investing by virtually everyone (index funds, mutual funds, etc.) If people want someone to blame for CEO compensation look at your 401k’s and then look in the mirror.
Andrew E.
October 9, 2017 at 1:56 PM
I don’t know if I buy that. Are index funds prohibited from exercising their muscle with regards to corporate governance? Vanguard has low executive compensation so you would think that what influence they have would be used to propagate that business model.
It’s far more plausible that the problem is a corporate structure that gives too much power and influence to the executives. The solution is more, stronger unions and a corporate reform along the lines of what they have in europe and japan (worker seats on the board, etc.)
Magnavox
October 9, 2017 at 4:12 PM
‘worker seats on the board’.
ROFL! Insane idea, if you ask me. What’s their input exactly?
Yakov
October 9, 2017 at 8:31 PM
I bet the majority of people with salary’s above a million year are engaged in some type of unethical activity.
GondwanaMan
October 9, 2017 at 10:28 AM
it isnt like a lot of these super rich guys have huge responsibilities to burden either. the opposite seems true. they fuck up their companies royally and get huge severance / golden parachute packages out of it. what “responsibility” lol.
james n.s.w
October 9, 2017 at 10:30 AM
When you see some huge salary, often part of the salary is compensation for the risk of being convicted of a crime and put in jail, doing something that is required by the job.
That is true obviously for known criminal organizations, but it will also be true of supposedly legitimate businesses and engage in criminal activity now and then. The money also buys silence.
Its less likely where there is a very rare but needed skill involved, like with professional athletes. But even professional athletes have to take all sorts of performance enhancing drugs, that put them at some risk in terms of their health, reputation, and even legal risk.
Ed
October 9, 2017 at 11:49 AM
“No one can earn 50 million dollars honestly”
4 star restaurateurs are multimillionaires, just by feeding value transference parasites in Manhattan.
JS
October 9, 2017 at 2:39 PM
Trump has no real deeply held beliefs other than “what’s in it for me?” But he is a shrewd enough hustler to see that there was a gaping hole in American politics that no one else had the balls to fill. Bannon smartly perceived that Trump was power hungry enough to run on Bannon’s platform. The question now is can Bannon keep Trump on the reservation. It looks like Trump’s base is united enough to keep Trump fairly honest on key issues like immigration. Trump’s instincts on taxes and healthcare are very far from populist but Americans are trained from birth to believe that being rich is a moral virtue, so he will get away with it.
Peter Akuleyev
October 9, 2017 at 2:56 PM
When is Trump being impeached for Russian collusion?
Andrew E.
October 9, 2017 at 3:09 PM
I read somewhere that Kenneth Starr believes there will be indictments resulting from the Mueller investigations, specifically of Michael Flynn and Paul Manafort. Trump’s name wasn’t mentioned? Is that good news for Trump?
Roli
October 9, 2017 at 10:14 PM
Tax reform is not going to happen. There is no way to cut taxes without increasing spending. Bob Corker will lead the Republican charge against tax reform for that reason. John McCain is a permanent ‘no’ vote on any Trump bill until McCain dies.
It is great fun when Trump puts Republican congress critters in their place but then they never have a sense of humor about it and stay butthurt forever.
Dan
October 9, 2017 at 3:34 PM
Lion, are small business owners value transferers or value creators? (I’m not saying they can make $50 million but they can develop wealth of $10 or $20 million.)
CamelCaseRob
October 9, 2017 at 3:03 PM
Yakov’s small HVAC business creates value.
Lion of the Blogosphere
October 9, 2017 at 4:31 PM
Would it be amiss to say that Lion and Yakov are friends beyond the pages of this journal?
Roli
October 9, 2017 at 10:18 PM
Why do you think so?
Yakov
October 10, 2017 at 9:04 AM
Everybody seems to talk about taxing the rich more, like you, but it never seems to happen. Even when the Dems controlled the presidency and both houses of congress it didn’t happen.
CamelCaseRob
October 9, 2017 at 3:05 PM
If you are talking about accumulating $50 million over a lifetime this is possible without doing anything particularly dishonest. You just have to be some combination of talented, hard-working and lucky.
In what way do you think J. K. Rowling was dishonest?
James Shearer
October 9, 2017 at 4:09 PM
She didn’t personally create a billion dollars of value, her books aren’t the greatest ever, somewhere there’s an undiscovered author whose books are objectively better.
Lion of the Blogosphere
October 9, 2017 at 4:35 PM
If she didn’t create the value, who did? At a moment in time she was writing exactly what the market wanted. This was fortunate for her but I don’t see any dishonesty. And what does “objectively better” mean in the context of popular fiction? If the readers like it it doesn’t matter if you think it is garbage.
James Shearer
October 10, 2017 at 12:34 AM
She “created value” for the readers who were entertained. There was nothing dishonest about her getting rich, even if she was more fortunate than many other worthy authors. It was not dishonest that her publisher pushed her books harder than other books — and based on the book sales, that publisher made the correct decision. (I say all this even though I don’t especially like her books and regard them as quite poorly written, and I detest JKR herself.)
Tarl
October 10, 2017 at 10:48 AM
Writing is a winner-take-all occupation. People read her books BECAUSE she wrote them. When she published a book under a pseudonym, no one read it. Then, when it was discovered that JK Rowling wrote it, sales skyrockeded.
Lion of the Blogosphere
October 10, 2017 at 12:54 PM
People kept reading her books because they kept obtaining (entertainment) value from them. If the books stopped being good, people would stop reading them. There are authors I like who stopped being good, at least in my opinion, and I stopped obtaining value from them so I stopped buying their books.
In order to be the winner in the winner-take-all writing contest, you have to create value for the readers and for the publishers. JKR unquestionably did that.
Tarl
October 14, 2017 at 9:06 PM
it depends on what is meant by “honestly”. winner take all may be one of the rules, but it means all those except the winners wasted their time. so much is wasted in such competitions in the US it’s clear that muh free market is very inefficient. it’s true of executives and entertainers. someone has to occupy the winners’ positions. the winners aren’t especially talented value creators. they’re just the winners. they don’t do anything that no one else can do. they just do whatever it is a little bit better…theoretically. why own a rembrandt when you can own a reproduction? it’s positional goods in the form of labor…positional labor.
ron burgundy
October 9, 2017 at 6:51 PM
Et tu, Brute? Taxing the rich because they are immoral? You became a moralist now? ROFL! Maybe they should be taxed more, I don’t know, but not as an act of moral outrage by people dripping with envy.
Politicians, they are moral, yep. They need more money to steal, embezzle and mismanage. Let’s take it from the guys, who did something in life, and give to politicians to put more people on the government assistance needle. Let’s do that in the name of morality now. Or maybe more money is needed for the bombs to destroy more countries in the name of democracy? Lion, you are insane!
Yakov
October 9, 2017 at 8:40 PM
“Not fair that you have more stuff than him!” — a mountain of skulls has been built over this idea.
Tarl
October 10, 2017 at 10:49 AM
The point is that Trump is a supply-sider.
He wants tax cuts for supply side reasons to move the economy out along the Laffer Curve. This will have the effect of increasing tax revenues as the cuts increase economic growth.
The key point to keep in mind is that there are two tax rates where the government gets zero revenue: a tax rate of 0% and a tax rate of 100%.
0% is obvious. At 100%, people choose leisure, work sloppily and move their economic activities underground. The government is effectively starved of tax revenue.
Moving from the points of 0 and 100, you soon discover that there are always two tax rates that yield the same revenue. A tax rate of, say, 90% may yield the same revenue as 10%…but the 10% tax is presiding over a much larger economy.
The whole point is to move along the Laffer curve to an optimum point, once you realize that a 10% tax may be too low or a 90% tax may be too high.
Reducing marginal tax rates from 35% to 25% represents about a 33% increase in profits and income. That is, it is a maximum increase of 33% in profits and income the smaller the economic unit gets. Sure, an entity like Apple may experience a smaller benefit because much of their profits are in untaxable structures. But the smaller the business gets and the lower the worker, the greater the windfall effect is. And even Apple will question the priority of tax avoidance if the lower rates allow it to keep more of its money and use it for other things other than paying lawyers.
The effect is huge for small businesses and workers. Business like these can use their 33% increase in profits to cannibalize the market share of larger rivals. This is why big business hates these tax cuts. They want the tax system in place to keep other firms down, since they already have the legal means to avoid paying these taxes. With supply-side tax cuts, big business advantages are weakened.
In fact, the “revenue-neutral” scam is precisely calibrated so as to negate the beneficial effects of supply-side tax cuts. Big business wants to keep small business down and most republicans are stupid austerity junkies that think government is “too big” or spends “too much” so they fall for this demand-side fiscalist nonsense all of the time.
Proper tax cuts will lead to increases in tax revenue and more investment in America. Why? Because smaller firms can’t go overseas. They will be forced to invest here.
map
October 9, 2017 at 9:01 PM
I can’t believe anyone is stupid enough to keep falling for that bullshit after nearly 40 years.
Magnavox
October 10, 2017 at 11:16 AM
Falling for it? It’s a real solution.
map
October 11, 2017 at 1:58 PM
I too am surprised that you want to hang your hat on Bryan, who, despite being a Democrat and economic liberal, is best known in contemporary liberal culture for being a right-wing religious troglodyte who opposed the teaching of evolution. But, supposing you can forgive him such an egregious offense, your modern-day estimate of $50 million is way off. The earliest data the CPI Inflation Calculator has is for January 2013. Bryan lived from 1860-1925. So, suppose he said this in 1913, when he was 53 years old. According to the calculator, $1 million at that time has the same buying power as $25,052,959.18 today–only half of $50 million. And what if he said it on his deathbed, in July 1925? $1 million at that time is equivalent to $13,871,129.94 today. What if Steve Bannon’s net worth exceeds that? I guess he’s not really a populist!
Hermes
October 9, 2017 at 11:46 PM
There is a famous quote, erroneously attributed to Balzac: “Behind every great fortune lies a great crime.”
Although the quote is false, the insight is true.
balzac
October 10, 2017 at 1:16 AM
Sounds like something jealous losers would say.
Tarl
October 10, 2017 at 10:50 AM
Sounds like something a rich person would say so that he can make people feel bad for noticing that he stole all of their value. And so many losers fall for it.
Lion of the Blogosphere
October 10, 2017 at 12:54 PM
it’s just taking away money they aren’t morally entitled to in the first place.
Why is “value transference” immoral? Is there some past post where this assumption has been explained? Unless the person who benefits from value transference broke the law in some way, they are morally entitled to keep their money.
Tarl
October 10, 2017 at 10:56 AM
Just because something is not illegal doesn’t mean it’s not immoral.
Lion of the Blogosphere
October 10, 2017 at 12:56 PM
That doesn’t answer the question. What’s immoral about value transference?
Tarl
October 14, 2017 at 9:00 PM