Where do billionaires come from?
Douglas French, president of the Ludwig von Mises Institute, reminds us where the term “millionaire” came from. It was
coined in 1720 during John Law’s “Mississippi Bubble” to describe those making vast fortunes in Law’s Mississippi Company stock that rose from 150 livres to 10,000 in the matter of months. But just as quickly, the stock and the currency wildly inflated by Law’s Banque Royale, crashed and Law was forced into exile.
Today’s plethora of billionaires — which in 15 years has increased fivefold — is (argues French) at least in part the result of Ben Bernanke’s monetary manipulations. He’s the John Law of our time. “What were once Law’s millionaires are now Bernanke’s billionaires. . . . Bernanke has been on the job for six years, and the Gates, Buffetts, and Slims of the world are reaping the benefit. But for how long?”
Keeping track of today’s billionaires has become both a form of popular entertainment (Forbes’s list) as well as a topic for careful study. The political “philanthropy” of George Soros and Charles Koch inspires both enthusiasm and dread in activists, left and right; Warren Buffett has become something of a hero to the 99 percenters, what with his repeated pitches for higher taxes on the rich.
But Buffett is a sly one. He makes his money in a variety of ways — one of which Peter Schiff recently explained: “Buffett actually stated in September 2008 that he would not have invested in Goldman Sachs if not for the implicit guarantee of federal assistance. As a result, he profited at the expense of taxpayers at the very time when they were losing their savings in the markets.”
Not all billionaires are created equal.
This is Common Sense. I’m Paul Jacob.
4 replies on “Billions and Billionaires”
Well no wonder he has such glowing admiration for the administration policies. Slip me a couple of mill and I’ll gush over them too, on my way to the bank
And, billionaires take care of their own.
Bloomberg gave Goldman Sachs all sorts of incentives ( and I beleive tax breaks) on theri new office buildign, for them to ‘stay in NY”.– As there are many places they could mvoe to.
But John Six pack gets no such breaks on his modest home.
People such as Buffet are “pragmatists.” Any means justifies the end. In their instance, the end is the accumulation of ill gotten gains.
Great analysis and comparison…as usual.
Gives new meaning to being ‘right on the money.’ Nice analysis Paul. I have some questions on the structure of the Fed, namely are the branch banks owned by other entities in the manner of shareholders? Do the branches ‘earn money?’ If so, who gets it?