• If you are having problems logging in please use the Contact Us in the lower right hand corner of the forum page for assistance.

U.S. is still very much the land of opportunity

Cal

Well-known member
http://www.realclearpolitics.com/articles/2007/09/the_forbes_400_as_a_lesson_in.html

September 28, 2007
The Forbes 400 as a Lesson in Economics
By John Tamny

The 2007 edition of the Forbes 400 was released last week. As in years past, it's one of the more useful economic annuals when it comes to laying bare the folly of anti-trust, worries over the wealth gap, and perhaps silliest of all, the assumption that the rich became that way for exploiting the non-rich.

Anti-trust is of course a viable concept given the belief of many that wealth creation is static, and that tomorrow will look like today such that regulators must insert themselves into commerce to avoid immovable economic consolidations. In truth, capitalist economies are far from stationary, and for evidence we need only look to a graph in the latest issue that shows the makeup of the first Forbes 400 in 1982 compared to the latest.

Back then most American fortunes were in the oil and manufacturing space, while technology was mostly an afterthought. Fast forward to 2007, technology trumps oil, and the largest wealth concentration is within the area of finance and investments. With the Dow Jones Industrial Average having fallen to a modern low of 743 in 1982, no one would have predicted Wall Street's rise, and as anti-trust rulings can only account for what's happening in the present, government officials would be wise to tread lightly in that the corporate behemoths they seek to restrain today may be coming to them for help tomorrow.

Case in point is Microsoft's attempt to halt Google's purchase of Doubleclick. The former was once the hunted when it came to anti-trust given its dominance in software. But perhaps due to its own lumbering nature, Microsoft was caught flat footed by the rise of the Internet; the result being that Google, a company founded in the proverbial Silicon Valley garage, was able to aggregate enormous market share in the Internet search area. Well behind its formerly microscopic rival, Microsoft is now lobbying the same government that sought to reduce its market power in hopes of reducing Google's muscle in search. Rather than retard Google's activities, government officials would do better by us all if they did nothing knowing full well that Google's ascendance will eventually be halted by another market entrant presently unknown.

Even though the wealth gap is a positive in most economies for driving the economic creativity of those not-yet-rich, much is made of it in the media and among politicians who worry about individual wealth consolidation even more than they do the corporate kind. A quick look at the Forbes 400 would surely assuage some of their fears.

Indeed, of the charter members of the first Forbes 400, only 32 remain today. Far from a country where only the rich get richer, the wealthy in the US are very much a moving target. While there are 74 Forbes 400 members who inherited their entire fortune, 270 members are entirely self-made. Though many attended Harvard, Yale and Princeton, there are countless stories within of high school and college dropouts, not to mention others who grew up extremely poor. Politicians who regularly engage in class warfare would do well to keep the Forbes 400 out of the hands of their constituents, because it makes a mockery of the kind "Two Americas" rhetoric suggesting the existence of a glass ceiling that keeps hard workers at the bottom of the economic ladder. To read the Forbes 400 is to know with surety that the U.S. is still very much the land of opportunity.

Ludwig Von Mises once wrote that the entrepreneur who fails to use his capital to the "best possible satisfaction of consumers" is "relegated to a place in which his ineptitude no longer hurts people's well-being." Conversely, successful entrepreneurs give consumers what they want, and remove what Von Mises termed "uneasiness" from our daily lives by making us happier, healthier, and frequently, wealthier. When we read the stories of these brilliant capitalists, it becomes apparent that Von Mises knew well what he wrote.

From Jaws to Jurassic Park, Steven Spielberg (Forbes rank #117) makes movies that people want to see, and when people want to be seen, Ralph Lauren (#64) and the Fisher brothers (#361) design clothes for Polo and Gap at varying price points that people want to be seen in. When the sun makes it difficult to see, or, alternately makes us too visible, people can purchase the various sunglass stylings of Oakley founder James Jannard (#239).

Thanks to Amazon founder Jeff Bezos (#35), consumers the world over have access to all manner of obscure and not so obscure products - all with a click of a mouse. For coffee lovers, Howard Schultz (off the list this year, but still a billionaire) seeks to put his Starbucks outlets anywhere and everywhere, including across the street from each other to make visits to his stores as convenient as possible. Starbucks locations of course sell iTunes, the brainchild of Apple founder Steve Jobs (#56), which means music enthusiasts increasingly dictate to the music industry how and where they'll purchase the music for their iPods.

Michael Dell's (#8) innovations with just-in-time inventory have made the once unique computer increasingly ubiquitous; those computers made user-friendly by the software genius of Microsoft founder Bill Gates (#1) who famously said long ago that the future would be one of personal computers "on every desk and in every home." Advancing on Gates when it comes to personal wealth, Google founders Sergey Brin (#5) and Larry Page (#5) gave us search technology for free that has turned what was once for many a word-processor into a powerful search engine for information that greatly improves the words we process.

If divorce rates fall in the next decade, happy couples might want to thank Garmin founders Min Kao (#64) and Gary Burrell (#114) for designing global-positioning systems for cars that will surely reduce the bickering that results from trying to get from Point A to Point B. And for those lacking GPS technology, Craig McCaw's (#135) cellular innovations will at least save couples from having to stop at gas stations and/or pay phones to find that which seems invisible.

For the hard of hearing, Advanced Bionics founder Alfred Mann (#204) developed cochlear implants, and for those who are immobile, Stryker Corp. CEO John Brown (#380) makes artificial hips and limbs to help the bedridden stand. With cancer still a tragic fact of life for many, Abraxis CEO Patrick Soon-Shiong (#117) presently has the patents for 30 different treatments that will hopefully over time help to make cancer go the way of polio.

A constant complaint among workers at all levels is that management does a poor job. Carl Icahn (#18) agrees, and to fix the latter, he buys troubled companies in order to improve their administration, all the while agitating entrenched managers of companies he owns a percentage of to fix what's wrong or be fired. Google was mentioned earlier, and due to the foresight of venture capitalists John Doerr (#271) and Michael Moritz (#380), it had the funding to morph from a non-entity into the work-enhancing business that it is today. Notably, the capital available to fund these efforts is frequently offered up by the wealthy from their existing surplus. This should be remembered the next time politicians offer to "help" through soaking the rich. Without capital, there are no wages, nor is there money for the various start-ups that provide new and exciting jobs.

To read many business journalists today, one might assume that the U.S. economy is stratified, offers little room for advancement, and that those at the top are impervious to market forces while enjoying market power that enables them to fleece the less fortunate. Thanks to the lessons offered up yearly in the Forbes 400, we know the opposite is true. Successful people are that way because they make our lives exponentially better, while yearly dropouts from the Forbes list frequently offer evidence showing that consumers punish those who falter. For that, we should be glad that the Forbes 400 goes against the conventional grain and celebrates successful American enterprise.

John Tamny is an editor at RealClearMarkets. He can be reached at [email protected]
Page Printed from: http://www.realclearpolitics.com/articles/2007/09/the_forbes_400_as_a_lesson_in.html at September 28, 2007 - 10:37:15 PM CDT
 
A

Anonymous

Guest
For the first time, it required more than a Billion to make the Forbes list. And they were not necessarily people who EARNED their money.

The children of Barbara Cox Anthony replaced her on the list when she passed away this year. They just happened to be born wealthy.

The youngest member of the "club" is John Arnold, a former Enron trader who now runs a hedge fund. He's probably made his billion partly by selling worthless Enron shares. We'll see if his hedge fund stays viable in the current financial climate. If it goes bust, you can bet he'll have his money safely tucked away while the investors lose their shirts, just like Enron. Nearly half of the new additions to the list are money maniuplators from Wall Street, not people who have created new technology to make our life easier.

John Paulson joins the list after pocketing more than $1 billion short-selling subprime credit this summer. The subprime credit market is now one of the biggest threats to our economy. But Mr. Paulson has his money.

While the middle class has struggled just to stay even under this Administration, the collective net worth of the nation's wealthiest rose $290 billion to $1.54 trillion.

http://www.forbes.com/2007/09/19/forbes-400-introduction-lists-richlist07-cx_mm_0920richintro.html
 

Texan

Well-known member
ff said:
...And they were not necessarily people who EARNED their money.

The children of Barbara Cox Anthony replaced her on the list when she passed away this year. They just happened to be born wealthy....
Maybe you'd like it better if we had a 100% Death Tax? Just give all of the wealth in this country to the federal government to redistribute?
 

MoGal

Well-known member
No, we don't need a 100% death tax, but until the American people wake up and realize that the Federal Reserve is not a government and that it is private individuals who print the money press. They make money out of NOTHING and obtain real assets for it. IF the people took back the money press, we could back it with metals and grain (corn and wheat). We could give out low interest loans to businesses who would rebuild the infrastructure in the USA (we need manufacturing jobs and an oil refinery among other things). People don't want welfare, they want a job with benefits and a pension. OUTSOURCING jobs is not global economy but corporate greed is chasing the low slave labor and lobbyists (backed with corporate money) is running Congress.

Here's an article and this is a good writer
http://www.atimes.com/atimes/Global_Economy/GF16Dj01.html
The transition to offshore outsourced production has been the source of the productivity boom of the "New Economy" in the US in the past decade. The productivity increase not attributable to the importing of other nations' productivity is much less impressive. While published government figures of the productivity index show a rise of nearly 70% since 1974, the actual rise is between zero and 10% in many sectors if the effect of imports is removed from the equation. The lower productivity values are consistent with the real-life experience of members of the blue-collar working class and the white-collar middle class who have been spending the equity cash-outs from the appreciated market value of their homes. World trade has become a network of cross-border arbitrage on differentials in labor availability, wages, interest rates, exchange rates, prices, saving rates, productive capacities, liquidity conditions and debt levels. In some of these areas, the US is becoming an underdeveloped economy.

Here's one from the author of "Jekyll Island" and helps understand how the Federal Reserve works and how they've taken the money from the middle class, redistributed it to other countries and the wealthy.
http://www.bigeye.com/griffin.htm

This is a good one and click on the "comments" at the bottom and see how our economy is shaping up from the removed Wilipedia and Google entry on banking. Our economy now is just like Japans that collapsed after WWII.
http://www.informationclearinghouse.info/article18437.htm
The Era of Global Financial Instability
By Mike Whitney
-------------------

We are in the land of the haves and the have-nots. Many of those "haves" in that Forbes list unscrupulously got their money by defrauding others in the stock market. TRILLIONS have been lost in this fall out bubble and most middle class Americans who invested their 401k's and retirement pension funds are going to find out its all gone. But by all means, lets promote those people on the Forbes list as good Americans who just managed to make a buck in the stockmarket...... never mind that some of them had fraud in mind (promoted by the Federal Reserve because they encouraged the fraud by not monitoring these bundles of debt)

We've become a country that promotes evil as good and good is evil. What has happened to our morals, character and integrity?

Cal, I realize this is more than what you wanted to hear, nor am I saying that all of those on the Forbes list are crooks.... but I do wonder how many of them will have criminal charges brought against them when this "bubble" has cleared and many are saying now that its going to take several "years" for this to blow over.....
 

Cal

Well-known member
One thing you can count on MoGal, is that your dismal attitude, skewed understanding of economics, and sense of doom and entitlement, is rarely (probably never) found in truly successful people.
 
Top