How Money Really Works

A 1-post collection

Dear Moneymakers, (an open letter)

And by this, I mean all corporate “persons”, executives, super-rich and basically, everyone who is making their money by just having money.

You’re doing it wrong.

Current economic theory states that if you give enough money to the already-rich, some of it will inevitably “trickle down” to the lower classes, the world will become everyone’s oyster and we’ll all be knee deep in pearls.

Everyone not amongst the already-rich knows this theory is pure, unmitigated bullshit.

Let’s explain why with a simple thought exercise.

Imagine, for a minute, that we have three families. The Riches, the Middles and the Poors. Each family has two kids, just to make things “fair”.

Now, imagine that some benefactor up and gives each family one thousand dollars. What actually happens to this money?

Trickle down theory states that the Riches will use this money to create jobs for the Poors, and thus aid the economy. This is not so. Since the Riches already own everything they could [including most businesses in the area and a goodly portion of the alleged government] they sneer at the $1000 and declare it “chump change” before sticking it in their daughter Porche’s [Rich families always have one member named after some high-priced car. I’m baffled about why] old piggy bank and forgetting about it.

So much for trickling down.

Now, the difference occurs at the Middles. There are less and less Middles as the Riches keep buying up businesses [and the odd politician] and lay off millions in favour of sending the jobs overseas or hiring illegal immigrants to do three times the work for a quarter of the pay. But let’s not think about that right now. Let’s focus on what happens when the Middles get $1000.

Now, assuming the benefactor doesn’t make a dick move like taxing the Middles on their new-found wealth… the Middles are going to spend that money on extras. Extra treats, extra toys for the kids, maybe even a low-rent holiday. Fun things. Or they may spend the $1000 dealing with a localised crisis, like Grampa’s medical bills. Or, given the current economic scene, they may fritter it away on little things like food, bills, education and medical care.

The local economy has a little bit of stimulation. Businesses - assuming they aren’t already operating under the iron fist of the Riches - spend that extra money on, say, hiring new staff, or buying new stock, or maybe even investing in community projects that keep the money circulating and doing good deeds.

But, inevitably, that money goes on something owned by the Riches. And as we’ve seen, once the Riches have money, they spend as little of it as humanly possible.

Now let’s look at the Poors. What are the Poor family going to spend their $1000 on? If you answered, “lottery tickets” or “booze”, leave the room and take some reality pills. The Poor are already in economic trouble. They are juggling life based on their next paycheque.

One thousand dollars is a godsend to the Poors.

It could go to pay off one of their credit cards and give them some breathing space for a week or two. It could pay for little Bobby’s life-saving medicine. It would not go on health insurance because all the health insurance companies are owned by the Riches and the premiums are so high for the Poor family that only the Riches can afford it. It may even go to the local greengrocer for some hideously expensive healthy food [grown in chemically-saturated farms owned by the Riches] so the kids won’t get sick and cost the Poors more money this week.

The Poors would go through that thousand dollars in a cold second, and wind up back where they started in just as short a time, because they were already in deep trouble to begin with.

Now, because there are WAAAAY more poor people than rich, the Riches notice something funny. All the corporations specifically targeted at the Poors experience a sudden influx of cash-flow. Credit agencies get a boost. Grocery stores get a sudden spike in their income. Medical centres have a run on Panaceanol [I made that medicine name up, don’t go looking for it]. And, by and large, the Riches are better off than they started.

Money doesn’t trickle down. It flows upwards.

Give a little money to a lot of people, and just watch the economy bounce upwards for a little bit.

Uncle Sam, I double-dog dare you to try this at home. Especially the bit about giving money to poor people. I bet you everything I have that my method works many times better than “trickle down”.

And why not? If things keep going the way they are, the Riches are going to own everything I have, anyway.