Wednesday, March 14, 2007

Morons are Infuriating

I read this article titled "Why do the rich give away so little?" by Austan Goolsbee. Goolsbee bemoans the fact that most rich people don't give away lots and lots of their money.
Goolsbee writes:
The rational economic argument for accumulating wealth says that people want to use it for something: to spend, to give to their families to enhance their future standard of living or to do something philanthropic. When you look at the Slate 60 list, however, you see that philanthropy can’t be the main reason. For all of their amazing generosity, the super-rich typically do not give away their entire fortunes, or even a big share. That’s what makes Buffett so notable. For 2006, the Slate 60 not including Buffett pledged or gave a little over $7 billion to charity. Yet as of September 2006, the 60 richest Americans had an estimated $630 billion of wealth, up more than $62 billion (about 10 percent) from the year before. People are accumulating money much faster than they are giving it away. Carroll says the super-rich can’t be accumulating the money with the intention of spending it, either, because no one could spend that much.
I found it very irritating because the author is under the impression that wealthy people hoard money and just sit on it, like Scrooge McDuck. I can understand being angry about that, that would be monumentally stupid and hurt pretty much everyone, but rich people are anything but stupid with their money (duh, that's why they're rich). The money of rich people is almost always productive; they have investments. If Goolsbee had taken any time at all to think from the perspective of a rich person, he wouldn't have written this article. It's one thing to be angry at the rich, but this is just moronic.

I have recently learned that Goolsbee is a professor of economics at the University of Chicago (link), which just further confuses me. Shouldn't Goolsbee know better? I spent some time re-thinking this article, but I still can't figure out where he's comming from.

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