On the bashing of billionaires...

There's been much talk about income and wealth inequality in US, and indeed the rest of the world, for the past few years. Arguably those are part of the reasons millennials tag further to the left, opting for Bernie Sanders (the self-proclaimed socialist) than the middle-of-the-road, keep-the-current-system-going Hillary Clinton in the 2016 primaries for the Democrats. That election came and went. HRC lost, and we have an alleged billionaire (Trump) in the White House now.

The fact that Trump won the 2016 election has been an interesting phenomenon. The supposedly little guys (read: white, working-class voters) ditched the unions and Dems in droves. Instead of embracing the do-nothing agenda (except maybe to the LGBTQ community and refugees) propositioned by HRC, they flocked to the rip-'em-up-and-burn agenda of Trump. Trump, being so unfit as president both intellectually and temperamentally, it's become vogue to bash the wealth, given Trump the self-proclaimed Exhibit A of billionaire with ostentatious wealth.

If one could say GOP has lost its soul by tacitly endorsing (or by overtly staying silent on) Trump and his policy agenda, one can also say that Dems are also desperately in search of its lost soul.

The era under Bill Clinton has seen much success economically, but he has also shifted so much to the center (even right of center) by embracing so much of GOP policy agenda. The economy loves it. The two main parties have become almost indistinguishable when it comes to embracing big businesses and trade deals that everyone was eager to move ahead, so much so that, if it means leaving the little guys behind, so be it. Those were the years when offshoring of operations started. By the turn of the century, it has basically completed in gutting the manufacturing sector in US, either near-shoring to Mexico (thanks to NAFTA) or offshoring to China/India (thanks to championing on China's behalf into WTO).

It's little wonder why the little guys have become so bitter. The more interesting twist since 2000s is that, the little guys now include all those younger generations who largely couldn't get ahead.

This is all while the concentration of wealth (never mind income inequality) continues to accelerate. That inverted funnel, in which an increasing amount of wealth goes increasingly to a very small group of elites. This is happening not just in US, Europe, Middle East, Africa, but in China, Latin America, and certainly in Russia as well.

No one seems to be able to stop that trend (of wealth consolidation into fewer hands). In autocratic and authoritarian countries, this will not stop, for the most obvious reasons. Even in supposedly democratic countries like US, the worship of money (arguably started since the go-go, junk bond days in the 1980s) makes it hard to anyone to even think that being able to earn an obscene amount of money is a bad thing. Trump, for one, touts that fact, and he does it on steroid.

It's worth the time to take a step back, to dissect the notion of a billionaire. Yes, we all know that we don't need a billion dollars to live a comfortable, meaningful (alas!) life. But before we jump to the morals of using one's wealth responsibly (alas!), one should ask, how do these individuals get to accumulate this much wealth in the first place.

There are cases like the oil oligarch in Russia, state-owned enterprises in China, even in other countries where getting the right connections (eg. those who benefited from the close alliances with the Soharto and military in Indonesia) would guarantee them access to business opportunities that in turn would guarantee them instant wealth. This is corruption, benefiting from corrupt systems, through and through. For these billionaires, confiscation of their wealth should suffix, no question. But whether their respective (corrupted) government will do anything about these protected individuals is a totally different questions - of course the government should, but will they?

And then there are cases where entrepreneurs spend years, decades even, in building a business through hard work. (I don't use the word legally since money can indeed sway, even buy, a system they want, to make something looks legal. This is what happens with two-tier systems, one set of rules for the rich, and one for the poor. Cases in point: carried interest, Ultra-low corporate tax rate versus the far higher income tax.) No doubt that these entrepreneurs have the dreams of being successful, but I much rather doubt that their first dream/goal is "to be a billionaire." These are the individuals that we should encourage, their businesses are what drive an economy, create jobs. They should not be penalize for being successful in the end.

There is however the notion that everyone should pay their fair share, contributing back to the society. Billionaires do not make money just by bootstrapping and sheer will (though these are part of the apparatus), they become successful because the society, the system, provides the infrastructure and stable for their businesses to flourish. If these individuals self-congratulate themselves that it's just because of themselves, and them alone, that billions can be made, that's simply BS. It is thus that there's an argument to be made, that billionaires have a social responsibility too, to give back, and contribute back to the society, and the world at large, in which their businesses have benefited so much from, albeit invisibly. For those socially responsible billionaires like Bill Gates and Warren Buffet, it's a perfect example.

A third category of billionaires - probably more likely broken into numerous millionaires and multi-millionaires - are those who inherit wealth from their predecessors. These are individuals who are simply there out of sheer luck (alas!) of being born into the right families with billionaire parents. While there's a question of fairness, since it's their inherited money by right. Their parents have worked hard for it, afterall (assuming their parents are the ones who worked to build the businesses). Here of course, the heirs could veer toward the socially responsible side (eg. the Waltons), or they could veer toward the ostentatious, self-absorbed side with total entitlement mentality (hello, Trump indeed). Although I don't have anything against inheritance, I don't think it's a healthy situation anyways. I'm thus not against heavy taxes on inheritance. These are cases that are perfect for giving back to society.

Now that we dispense with the notion that not all "billionaires" are created equal, let's see what they - and we as a society - can or should do about their billions of dollars in wealth.

But rather, the question is, can we as a society regulate how someone use their wealth (be it responsibly or ostentatiously)? The question is likely that, if we are to adhere to our principle of being an open society, that individuals are indeed the king of his own castle, then we can't - and shouldn't - be regulating how others use their wealth. Afterall if you can regulate someone's billions, what's there to stop you from regulating someone's millions, or even down to their pennies in pocket? This, in a few words, is a matter of fairness.

As society and from a public policy standpoint, it is thus better and easier and fairer to regulate it when the billions are being made, not after it's been made. Once it's someone's own property, it becomes much harder to extract, or even be justified whether the extraction is fair.

And so, when I look at all the Dems' proposal to tax the billionaires, even to the notion of abolishing billionaires, I'd say, it's a wrong-headed approach. Rather than grabbing news headlines to demonize billionaires (and it's so easy to do, given Trump's notoriety) - as shiny new objects like AOC and Elizabeth Warren have proposed to do - they could and should have looked harder into beefing up the current tax codes to plug loopholes that allows the rich and corporates to play with one set of rules while the rest 99% of people have to abide by another set of rules. But of course, that kind of news headlines ("let's fix the tax codes" is far less sexy than "tax the billionaires out of existence"). In a megaphone-hyped society, whoever sounds the more outrageous gets the attention and buzz. These young Dems have learnt well from Trump.

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In the meantime, with our globalized world, these billionaires have all the ways and means to move their domicile and wealth around the globe. If US becomes less receptive - and worships the money less - in all likelihood they would just pack up and leave to other tax havens. Many a country would bend over backwards to take them in. There's no doubt of that.