Letter 2 America for September 30, 2014

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Dear America,
BMW ORACLE Racing team owner Larry Ellison, he...

BMW ORACLE Racing team owner Larry Ellison, helmsman James Spithill, and legendary actor Harrison Ford watched the American flag raised on the schooner America during the event to introduce the team to the public. (Photo credit: Wikipedia)


I recently wrote to you about the current crop of self-characterized tech-altruists to question their validity as such, and in fact to pose the question of whether they are indeed benefactors, or are rather just robber barons with good public relations skills, and I specifically pointed the finger at Bill Gates.  He spends a billion or two every year in high profile endeavors like eradicating malaria in Africa, but still has managed to increase his wealth over the course of the past ten years from more than $60 billion to now more than $80 billion.  In that connection, I would point out that for a billion or so, Gates could probably fund the interdiction of the ebola outbreak in Africa, but to my knowledge, there hasn't been a word uttered by his philanthropy foundation.  I think a true altruist would have seized the opportunity.  But I also mentioned Larry Ellison, the prime mover at Oracle.  He has retired from Oracle and is now doing whatever he wants.  His last avocational endeavor was the Americas Cup team for the races last year, in which he spent who-knows-how-much money on our national yacht while people starved in lots of places because it was a matter of national pride that he thought important, and now that he has retired, he has bought an island--Lanai--in Hawaii.  He claims to want to create a new, entirely green place there for its few thousand resident...and fifty or so of his closest friends who don't already own enough mansions.  He wants to renew the two erstwhile luxury hotels and add another on the island to reinvigorate the tourist industry there, and as I said, create those fifty or so luxury lots for himself so he and his friends have a place to get away to.  It was the subject of a report in the New York Times Magazine this weekend, and it seems to tip the scales in the altruist-robber baron debate pretty clearly.  This project of his was at first met with general approbation among the 3000 residents of the island, but the blush is now off the rose, and the real Larry Ellison has stepped forward.  All the purportedly altruistic projects--a desalinization plant to provide fresh water both to the new enterprises and to the extant population who have lived with fresh-water supply shortages up until now, renovation of two golf courses, which has been incomplete and is now deleterious to the environment of the residents where weeds have taken over the various improvements made so far and the water on at least one of the courses has turned rancid, killing the fish and polluting the air with foul odors, and a solar array that was to provide energy for the island, but that hasn't really been evident so far--seem to be on hold, and what is left is incomplete daydreams apparently as ill-conceived as his yachting career, all of which manifests the problem created by having too much money.

Ellison fancies himself a dreamer, and probably a futurist in the mold of other great thinkers like Ronald Reagan, the proponent of the SDI--Starwars Defense Initiative--that cost billions and never produced anything worth having and Newt Gingrich, who has run for office on the basis of his claims to see what none of the rest of us can, which has made him rich, but hasn't done any of the rest of us any good at all.  The management company he set up to oversee his project on Lanai started out having all these humanistic town meetings with the population to tell them what the new developments were going to do for them, and the future looked bright at first.  But problems began to arise very quickly, and the government of the only town on the island began to assert itself when it began to look like Lanai was going to be a casualty rather than a beneficiary of all the development Ellison envisioned.  It almost seems as though now that Ellison has started the project, he has either gotten bored with it or doesn't want to spend the money to do for others rather than himself as he originally suggested was his intent.  Of course, it is still very early on in the process of development of the Ellison grand scheme, and things could turn around, but they could also go the way of his Americas Cup entry, which was oblivion rather than glory.

My point is that much of what happens in America these days is a function of the whims of people who have more money than they could ever spend, but who always think they need more.  Financiers go to jail over schemes to make more money than they already have, even when they already have too much to count.  People like Ellison and Gates promote their ideas brazenly, but sit like misers on vast hordes of gold as if in the end they amount to something in and of themselves, and we call it the American Way.  Meanwhile, we continue to send to Washington people who may not have money like Ellison and Gates do--they are the richest and the fifth richest men in the world--but who think that piling it up that way is a good thing and needs to be not only protected, but encouraged.  That's why I like Jeff Bezos, who is himself the seventeenth richest man in the world, but instead of buying an island and wreaking havoc on it in the name of some self-aggrandizing fantasy, he buys a world class newspaper and practically gives it away in the name of facilitating the informing of the American public, albeit also facilitating the building his retail empire even further, but I don't want the future of our nation to depend on the largess of these men, as it will if they have all the money...and thus all the power.

This is the issue of our time.  We are trending, as is China, Russia, Europe and every other developed or developing area of the world, toward not just oligarchy, but plutocracy.  If all those plutocrats are the philosopher kings that Plato commended as the best way to govern the masses, that will be all well and good, but it seems to me that by allowing our politicians to promote their ascendancy we are taking an awful risk: one that could only rectified by a revolution if it manifest itself in the way that I fear it will.  We need tax reform that demands of the super-rich that they pay at least what they paid in the years after World War II, that is, more than 50% of income, and we need to remove the Reaganesque distinction between capital gains and earned income when we are assigning tax rates.  We need to increase the tax on testamentary wealth transfers so that the profound wealth that at least arguably has been earned by these tycoons cannot be passed down to profligates and fools who will burn everything down rather than build it up.  It is only by reallocation of resources that we can avoid catastrophe, but all this seems very abstruse and of remote consequence.  So here's a prediction from an amateur.  If we don't undertake the redistribution of wealth soon, the near-term consequence will be deflation as a result of the decreased buying power of the masses of people who do the work, but who make little or no progress toward prosperity in our new economy.  That will be because there is too little money in the hands of people who will spend it since so much is in the hands of people who don't.  Goods then compete for buyers, and prices fall, which is like the onset of the crumbling of a house of cards.  We've seen it before in the 1930's, and even though it supposedly can never happen again, that is where we are headed.  Remember that when you vote.

Your friend,

Mike


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This page contains a single entry by Michael Wolf published on September 30, 2014 12:30 PM.

Letter 2 America for September 26, 2014 was the previous entry in this blog.

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About this Entry

This page contains a single entry by Michael Wolf published on September 30, 2014 12:30 PM.

Letter 2 America for September 26, 2014 was the previous entry in this blog.

Letter 2 America for October 3, 2014 is the next entry in this blog.

Find recent content on the main index or look in the archives to find all content.

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