Billionaires fear loss of their anti-capitalist advantages
Billionaires are wailing that Elizabeth Warren and Bernie Sanders's wealth tax proposals are attacks on free-market capitalism. Warren "vilifies successful people," says Jamie Dimon, CEO of JPMorgan Chase.
Rubbish. There are basically only five ways to accumulate a billion dollars, and none of them have to do with being successful in free-market capitalism.
The first way is to exploit a monopoly.
Dimon is worth $1.6 billion. That's not because he succeeded in the free market. In 2008, the government bailed out JPMorgan and four other giant Wall Street banks because it considered them "too big to fail."
That bailout is a hidden insurance policy, still in effect, with an estimated value to the big banks of $83 billion a year. If JPMorgan weren't so big and therefore allowed to fail, Dimon would be worth far less than $1.6 billion.
What about America's much-vaunted entrepreneurs, such as Jeff Bezos, now worth an estimated $110 billion? You might say Bezos deserves this because he founded and built Amazon.
But Amazon is a monopolist with nearly 50 percent of all e-commerce retail sales in America, and e-commerce is one of the biggest sectors of retail sales. In addition, Amazon's business is protected by a slew of patents granted by the U.S. government.
If the government enforced anti-monopoly laws and didn't give Amazon such broad patents, Bezos would be worth far less than $110 billion.
A second way to make a billion is to get insider information unavailable to other investors.
Hedge fund maven Steven A. Cohen, worth an estimated $12.8 billion, headed up a hedge fund firm in which, according to a criminal complaint filed by the Justice Department, insider trading was "substantial, pervasive, and on a scale without known precedent in the hedge fund industry." Nine of Cohen's present or former employees pleaded guilty or were convicted. Cohen got off with a fine and changed the name of his firm.