10 ms·

"I live in California, which has the highest poverty rate in the United States, even though it's home to Silicon Valley. I see my rich industry doing nothing to

"I live in California, which has the highest poverty rate in the United States, even though it's home to Silicon Valley. I see my rich industry doing nothing to improve the lives of everyday people and indigent people around us." This is trivially false. Over a hundred billionaires have now pledged to donate the majority of their wealth, and the list includes many tech people like Bill Gates, Larry Ellison, Mark Zuckerberg, Elon Musk, Dustin Moskovitz, Pierre Omidyar, Gordon Moore, Tim Cook, Vinod Khosla, etc, etc. https://en.wikipedia.org/wiki/The_Giving_Pledge https://en.wikipedia.org/wiki/The_Giving_Pledge Google has a specific page for its charity efforts in the Bay Area: https://www.google.org/local-giving/bay-area/ https://www.google.org/local-giving/bay-area/ This only includes purely non-profit activity; it doesn't count how eg. cellphones, a for-profit industry, have dramatically improved the lives of the poor.

alecb 10y ago
The issue is the concentration of the wealth itself, not what those who benefit from the concentration of wealth choose to do with it.
zoren 10y ago
As to the first claim. It seems Mississippi has the highest poverty rate at 21.9%. California is at 16.4%. Source: https://en.wikipedia.org/wiki/List_of_U.S._states_by_poverty_rate https://en.wikipedia.org/wiki/List_of_U.S._states_by_poverty...
- idlewords 10y ago
  This is by an antiquated measure. The accepted rate now is 20.6%, first in the nation. Discussion here: http://www.forbes.com/sites/chuckdevore/2016/09/28/why-does-california-have-the-nations-highest-poverty-rate/#3c56c46a3e89 http://www.forbes.com/sites/chuckdevore/2016/09/28/why-does-...
  - dragonwriter 10y ago
    The SPM is not, by any means, the "accepted rate". Whether it's a more appropriate measure for any particular purpose is a legitimate discussion to have.
- mmanfrin 10y ago
  "Thank God for Mississippi" https://en.wikipedia.org/wiki/Thank_God_for_Mississippi https://en.wikipedia.org/wiki/Thank_God_for_Mississippi
- Girlang 10y ago
  @dang should delete that post. We shouldn't be spreading fake news here.
pmyjavec 10y ago
I feel the problem is the fact there is 100 billionaires in he first place, no one gets rich on their own. Gates et al, are clever, but didn't get where they are totally independently without others support, so they should give back. Also, some of these billionaires are running companies that are great at tax avoidance, probably most of them. Now what? They get to pick and choose where they get to spend there/invest money? I don't buy it. I believe in wealth, just not this radical wealth separation .
- apsec112 10y ago
  Countries that have no rich people are never prosperous. You can raise marginal income tax rates from, say, 60% to 70%, and maybe that's a good idea overall, but it doesn't get rid of billionaires. High-tax Sweden has as many billionaires per capita as the US does: https://en.wikipedia.org/wiki/List_of_Swedes_by_net_worth https://en.wikipedia.org/wiki/List_of_Swedes_by_net_worth If you raise the marginal tax rate to 99%, then you get rid of billionaires, but you also kill your economy. There are all the failures of communist countries, of course, but even the UK tried this during the 60s and 70s. The government went bankrupt and had to be bailed out by the IMF. Inflation peaked at 27%, unemployment was through the roof, etc.: https://en.wikipedia.org/wiki/1976_IMF_Crisis https://en.wikipedia.org/wiki/1976_IMF_Crisis https://en.wikipedia.org/wiki/Winter_of_Discontent https://en.wikipedia.org/wiki/Winter_of_Discontent
  - kiba 10y ago
    I don't think it's possible to have a country without rich people, relatively speaking. In every country we seen have some sort of power hierarchy, therefore unequal distribution of wealth.
  - allenz 10y ago
    I agree with you that it isn't practical right now to get rid of billionaires. However, I don't think that it's some kind of economic theorem. The reasons that socialism failed are complex, and pure capitalism failed as well (think Gilded Age), which is why everyone lives in a mixed economy. It is reductionist to say that the 1976 IMF Crisis was caused by the tax rate instead of excess spending, monetary policy, and structural aspects of the economy. As a counterexample, postwar US had a 92% tax rate and did OK: http://www.slate.com/articles/news_and_politics/the_best_policy/2010/02/tax_fraud.html http://www.slate.com/articles/news_and_politics/the_best_pol... IMHO, most economies aren't able to raise the effective tax rate because the wealthy can add loopholes or shuffle their wealth elsewhere. This isn't an economic problem, but a political problem. Is there a political will to close loopholes and restrict the movement of wealth? Do people frame wealth in terms of freedom or in terms of societal obligations?
Veratyr 10y ago
It's not necessarily false. The quote you took seems to be referring to the homeless in California. The Giving Pledge requires that the money be given to philanthropy, which may improve the lives of others around the world, rather than Californians.
- Sniffnoy 10y ago
  That interpretation may make it true, but it would also seem to make it irrelevant. Unless Californians somehow have greater moral significance than people elsewhere.
ajamesm 10y ago
The ACA could barely roll out a website without tragic failure, how have cell phones "dramatically improved" the lives of the poor? They're still subject to as much bureaucracy and denial of basic services as ever. 4G hasn't improved public transpo. I suppose the poor are no longer subject to long-distance fees during daytime.
- apsec112 10y ago
  "how have cell phones "dramatically improved" the lives of the poor?" There's tons of stuff on this, but, eg., here's a poster from USAID: https://s-media-cache-ak0.pinimg.com/originals/09/35/2d/09352d334de4d47b29c48adcbd03b204.jpg https://s-media-cache-ak0.pinimg.com/originals/09/35/2d/0935...
  - ajamesm 10y ago
    Did you look at these metrics? They're weak as fuck. Most of them are "there's a platform or chart for this now" which is meaningless and probably intentionally decontextualized. To be clear, it's good that people have access to the internet and all the interconnectivity that it brings. I'm not slamming the basic premise. What I'm angry about is the opportunity cost. Telecoms & ISPs roll out bare minimums and say "hey look, now poor people can [cherry-picked thing that doesn't alleviate poverty]" when the real question is how we live in the most prosperous nation of all time, in an era when we have solved every basic necessity, and kids still experience food insecurity in American cities. Meanwhile, telecom CEOs merge back into monopolies. Dramatic improvement in the lives of the poor would yield better metrics than a 30% increase in Haitians using mobile banking. Christ, half of that increase could be from unconnected citizens dying from endemic disease & reducing the denominator.
    - cbr 10y ago
      This isn't the US, but cell phones make M-Pesa possible, which is very positive: http://www.jefftk.com/suri2014.pdf http://www.jefftk.com/suri2014.pdf http://www.jefftk.com/suri2016.pdf http://www.jefftk.com/suri2016.pdf
- 10y ago
ebbv 10y ago
Err, I hate to be the one to break it to you but those billionaires pledging to donate their wealth? It's just a tax dodge. They're moving their money into foundations before we pass stronger tax laws than we have at the moment. And it allows their families to continue to live off of (via salaries for running the foundations) the wealth for generations to come. Which is not to say they don't do some good work with it, the Bill and Melinda Gates foundation has done some great work fighting malaria and bringing fresh water to poor communities. But these same foundations also do a lot of other work, like furthering charter schools which benefits wealthy families to the detriment of poor communities here in the US.
- Klathmon 10y ago
  Personally I'd rather give billionaires more reasons donate their money than less. If setting up a foundation that actually helps a ton of people means that their families can get a fraction of that money back, that's fine with me... Unless you are implying that they are getting more money back through the salaries than they are in donating. In which case i'd love to see a source.
  - drawkbox 10y ago
    Similar reason that CEOs take the $1 salary, purely stock growth mixed with lower taxes and more under the radar to lower their taxable income [1] Most rich people that are mega wealthy pay minimal tax by taking loans against their foundations/trusts. As you know there are no taxes on loans but a percentage, that may or may not just go right back to them. They essentially use the trusts/loans and the fact that they are essentially zero risk to take out other loans that get interest rates below inflation, sometimes very minimal interest[2]. That is essentially free money. Should the interest rates ever adjust if not fixed they can buy outright quickly. The same thing happens with trusts/foundations. They have this hoarded money sitting there as a base they can leverage. Yes it is nice some will go to others when they pass but ultimately they would not do this if they could not use this leverage advantage. It is essentially a hack on lowering or even completely removing any taxable income as long as you have it. [1] http://www.cnbc.com/id/46236916 http://www.cnbc.com/id/46236916 [2] http://www.wsj.com/articles/SB10001424127887323527004579079162826690296 http://www.wsj.com/articles/SB100014241278873235270045790791...
imh 10y ago
You're talking about the people and he's talking about the industry. There's a difference between Microsoft and Bill Gates.
d_burfoot 10y ago
Yes, and even if you ignore philanthropy, the tech industry generates enormous amounts of tax revenue, which is supposed to be spent by the government to help improve the lives of "everyday people and indigent people". A question people don't ask enough is: given that we give vast trillions of dollars to the government, most of which is spent on various kinds of social programs (health care, education, social security, etc), why is there STILL so much poverty, joblessness, homelessness, drug use, crime, and other kinds of suffering in the US?
- pinaceae 10y ago
  so Apple, Google all pay full taxes in Cali? all profits booked into HQ? wow, they're awesome.
erikpukinskis 10y ago
Your assumption is that billions of dollars can be simply converted into poverty reduction. It seems possible to me that the technology to turn money into less poverty not only doesn't exist, but that the social structures that make men like Bill Gates rich also make it difficult to create such technology. Your implicit argument is that todays rich somehow care more about improving society than yesterday's did, which will cause these concentrations of wealth to lead to a different outcome. I'm not sure I see much of a difference between Gates and Carnegie. Different ideas about what the world needs, but not a particularly different approach to capital.
Animats 10y ago
California has 2.1 million illegal aliens. Once they're deported, the poverty rate will drop.
- witty_username 10y ago
  Apart from reducing the cost of the welfare system, that doesn't fix the poverty problem.
  - crummy 10y ago
    I don't think illegal aliens can get welfare.
- skybrian 10y ago
  Cite?
bambax 10y ago
How does a pledge about something you may or may not do in the future helps poor people today? How does "the majority of their wealth" address income inequality? Will said billionaires give away so much that they cease to be billionaires or even millionaires? And how are the actions of a few billionaires relevant to what the industry does as a whole? Does Google, Facebook, or, God forbid, Uber, address the problems of poverty and inequality (which are separate problems) as a company? To a very large extent, charity is irrelevant; charity is a way of buying oneself a conscience without actually changing anything in the world; without even addressing the problems or thinking about them.
danvdragos 10y ago
I say they should keep their money and control! Educate and involve them in important things early. The HARC initiative looks great. Such an initiative could answer questions like: What are important problems? What do we need to do to efficiently solve such problems? Have we spent too much effort on a single solutions? Is it time to try another way? What can we do to bypass bureaucracy? I trust businesses to have a mindset for risk and results. In my opinion charities behave more like guardians preserving/nurturing more than making a 10X change.
hwillis 10y ago
They may donate, but it may not be enough to balance out the increased prices they induce. Net effect would be no improvement.

alecb 10y ago

The issue is the concentration of the wealth itself, not what those who benefit from the concentration of wealth choose to do with it.

zoren 10y ago

As to the first claim. It seems Mississippi has the highest poverty rate at 21.9%. California is at 16.4%. Source: https://en.wikipedia.org/wiki/List_of_U.S._states_by_poverty_rate https://en.wikipedia.org/wiki/List_of_U.S._states_by_poverty...

idlewords 10y ago
This is by an antiquated measure. The accepted rate now is 20.6%, first in the nation. Discussion here: http://www.forbes.com/sites/chuckdevore/2016/09/28/why-does-california-have-the-nations-highest-poverty-rate/#3c56c46a3e89 http://www.forbes.com/sites/chuckdevore/2016/09/28/why-does-...
- dragonwriter 10y ago
  The SPM is not, by any means, the "accepted rate". Whether it's a more appropriate measure for any particular purpose is a legitimate discussion to have.
mmanfrin 10y ago
"Thank God for Mississippi" https://en.wikipedia.org/wiki/Thank_God_for_Mississippi https://en.wikipedia.org/wiki/Thank_God_for_Mississippi
Girlang 10y ago
@dang should delete that post. We shouldn't be spreading fake news here.

pmyjavec 10y ago

I feel the problem is the fact there is 100 billionaires in he first place, no one gets rich on their own. Gates et al, are clever, but didn't get where they are totally independently without others support, so they should give back. Also, some of these billionaires are running companies that are great at tax avoidance, probably most of them. Now what? They get to pick and choose where they get to spend there/invest money? I don't buy it. I believe in wealth, just not this radical wealth separation .

apsec112 10y ago
Countries that have no rich people are never prosperous. You can raise marginal income tax rates from, say, 60% to 70%, and maybe that's a good idea overall, but it doesn't get rid of billionaires. High-tax Sweden has as many billionaires per capita as the US does: https://en.wikipedia.org/wiki/List_of_Swedes_by_net_worth https://en.wikipedia.org/wiki/List_of_Swedes_by_net_worth If you raise the marginal tax rate to 99%, then you get rid of billionaires, but you also kill your economy. There are all the failures of communist countries, of course, but even the UK tried this during the 60s and 70s. The government went bankrupt and had to be bailed out by the IMF. Inflation peaked at 27%, unemployment was through the roof, etc.: https://en.wikipedia.org/wiki/1976_IMF_Crisis https://en.wikipedia.org/wiki/1976_IMF_Crisis https://en.wikipedia.org/wiki/Winter_of_Discontent https://en.wikipedia.org/wiki/Winter_of_Discontent
- kiba 10y ago
  I don't think it's possible to have a country without rich people, relatively speaking. In every country we seen have some sort of power hierarchy, therefore unequal distribution of wealth.
- allenz 10y ago
  I agree with you that it isn't practical right now to get rid of billionaires. However, I don't think that it's some kind of economic theorem. The reasons that socialism failed are complex, and pure capitalism failed as well (think Gilded Age), which is why everyone lives in a mixed economy. It is reductionist to say that the 1976 IMF Crisis was caused by the tax rate instead of excess spending, monetary policy, and structural aspects of the economy. As a counterexample, postwar US had a 92% tax rate and did OK: http://www.slate.com/articles/news_and_politics/the_best_policy/2010/02/tax_fraud.html http://www.slate.com/articles/news_and_politics/the_best_pol... IMHO, most economies aren't able to raise the effective tax rate because the wealthy can add loopholes or shuffle their wealth elsewhere. This isn't an economic problem, but a political problem. Is there a political will to close loopholes and restrict the movement of wealth? Do people frame wealth in terms of freedom or in terms of societal obligations?

Veratyr 10y ago

It's not necessarily false. The quote you took seems to be referring to the homeless in California. The Giving Pledge requires that the money be given to philanthropy, which may improve the lives of others around the world, rather than Californians.

Sniffnoy 10y ago
That interpretation may make it true, but it would also seem to make it irrelevant. Unless Californians somehow have greater moral significance than people elsewhere.

ajamesm 10y ago

The ACA could barely roll out a website without tragic failure, how have cell phones "dramatically improved" the lives of the poor? They're still subject to as much bureaucracy and denial of basic services as ever. 4G hasn't improved public transpo. I suppose the poor are no longer subject to long-distance fees during daytime.

apsec112 10y ago
"how have cell phones "dramatically improved" the lives of the poor?" There's tons of stuff on this, but, eg., here's a poster from USAID: https://s-media-cache-ak0.pinimg.com/originals/09/35/2d/09352d334de4d47b29c48adcbd03b204.jpg https://s-media-cache-ak0.pinimg.com/originals/09/35/2d/0935...
- ajamesm 10y ago
  Did you look at these metrics? They're weak as fuck. Most of them are "there's a platform or chart for this now" which is meaningless and probably intentionally decontextualized. To be clear, it's good that people have access to the internet and all the interconnectivity that it brings. I'm not slamming the basic premise. What I'm angry about is the opportunity cost. Telecoms & ISPs roll out bare minimums and say "hey look, now poor people can [cherry-picked thing that doesn't alleviate poverty]" when the real question is how we live in the most prosperous nation of all time, in an era when we have solved every basic necessity, and kids still experience food insecurity in American cities. Meanwhile, telecom CEOs merge back into monopolies. Dramatic improvement in the lives of the poor would yield better metrics than a 30% increase in Haitians using mobile banking. Christ, half of that increase could be from unconnected citizens dying from endemic disease & reducing the denominator.
  - cbr 10y ago
    This isn't the US, but cell phones make M-Pesa possible, which is very positive: http://www.jefftk.com/suri2014.pdf http://www.jefftk.com/suri2014.pdf http://www.jefftk.com/suri2016.pdf http://www.jefftk.com/suri2016.pdf
10y ago

ebbv 10y ago

Err, I hate to be the one to break it to you but those billionaires pledging to donate their wealth? It's just a tax dodge. They're moving their money into foundations before we pass stronger tax laws than we have at the moment. And it allows their families to continue to live off of (via salaries for running the foundations) the wealth for generations to come. Which is not to say they don't do some good work with it, the Bill and Melinda Gates foundation has done some great work fighting malaria and bringing fresh water to poor communities. But these same foundations also do a lot of other work, like furthering charter schools which benefits wealthy families to the detriment of poor communities here in the US.

Klathmon 10y ago
Personally I'd rather give billionaires more reasons donate their money than less. If setting up a foundation that actually helps a ton of people means that their families can get a fraction of that money back, that's fine with me... Unless you are implying that they are getting more money back through the salaries than they are in donating. In which case i'd love to see a source.
- drawkbox 10y ago
  Similar reason that CEOs take the $1 salary, purely stock growth mixed with lower taxes and more under the radar to lower their taxable income [1] Most rich people that are mega wealthy pay minimal tax by taking loans against their foundations/trusts. As you know there are no taxes on loans but a percentage, that may or may not just go right back to them. They essentially use the trusts/loans and the fact that they are essentially zero risk to take out other loans that get interest rates below inflation, sometimes very minimal interest[2]. That is essentially free money. Should the interest rates ever adjust if not fixed they can buy outright quickly. The same thing happens with trusts/foundations. They have this hoarded money sitting there as a base they can leverage. Yes it is nice some will go to others when they pass but ultimately they would not do this if they could not use this leverage advantage. It is essentially a hack on lowering or even completely removing any taxable income as long as you have it. [1] http://www.cnbc.com/id/46236916 http://www.cnbc.com/id/46236916 [2] http://www.wsj.com/articles/SB10001424127887323527004579079162826690296 http://www.wsj.com/articles/SB100014241278873235270045790791...

imh 10y ago

You're talking about the people and he's talking about the industry. There's a difference between Microsoft and Bill Gates.

d_burfoot 10y ago

Yes, and even if you ignore philanthropy, the tech industry generates enormous amounts of tax revenue, which is supposed to be spent by the government to help improve the lives of "everyday people and indigent people". A question people don't ask enough is: given that we give vast trillions of dollars to the government, most of which is spent on various kinds of social programs (health care, education, social security, etc), why is there STILL so much poverty, joblessness, homelessness, drug use, crime, and other kinds of suffering in the US?

pinaceae 10y ago
so Apple, Google all pay full taxes in Cali? all profits booked into HQ? wow, they're awesome.

erikpukinskis 10y ago

Your assumption is that billions of dollars can be simply converted into poverty reduction. It seems possible to me that the technology to turn money into less poverty not only doesn't exist, but that the social structures that make men like Bill Gates rich also make it difficult to create such technology. Your implicit argument is that todays rich somehow care more about improving society than yesterday's did, which will cause these concentrations of wealth to lead to a different outcome. I'm not sure I see much of a difference between Gates and Carnegie. Different ideas about what the world needs, but not a particularly different approach to capital.

Animats 10y ago

California has 2.1 million illegal aliens. Once they're deported, the poverty rate will drop.

witty_username 10y ago
Apart from reducing the cost of the welfare system, that doesn't fix the poverty problem.
- crummy 10y ago
  I don't think illegal aliens can get welfare.
skybrian 10y ago
Cite?

bambax 10y ago

How does a pledge about something you may or may not do in the future helps poor people today? How does "the majority of their wealth" address income inequality? Will said billionaires give away so much that they cease to be billionaires or even millionaires? And how are the actions of a few billionaires relevant to what the industry does as a whole? Does Google, Facebook, or, God forbid, Uber, address the problems of poverty and inequality (which are separate problems) as a company? To a very large extent, charity is irrelevant; charity is a way of buying oneself a conscience without actually changing anything in the world; without even addressing the problems or thinking about them.

danvdragos 10y ago

I say they should keep their money and control! Educate and involve them in important things early. The HARC initiative looks great. Such an initiative could answer questions like: What are important problems? What do we need to do to efficiently solve such problems? Have we spent too much effort on a single solutions? Is it time to try another way? What can we do to bypass bureaucracy? I trust businesses to have a mindset for risk and results. In my opinion charities behave more like guardians preserving/nurturing more than making a 10X change.

hwillis 10y ago

They may donate, but it may not be enough to balance out the increased prices they induce. Net effect would be no improvement.