My Journey...

We Should Pray for the Rich to get Richer (Bar Stool Economics)
by Charles Adler
March 12, 2009

It's been a tough year for the richest people in the world. That's a line right out of a magazine whose target market is the rich. My question to you, “Are we supposed to care that it's been a tough year for the richest folks on the planet, people like Bill Gates and Warren Buffett?” Yes, I care a lot. Not because I worry about them putting food on their table or a roof over their heads. I just don't do the Jack Layton thing when I see that kind of headline. I don't lick my lips and feel gleeful that some rich people are seeing their portfolios taking a hit...And the reason is, because I care about the rest of us. The non-billionaires and the non-millionaires. The rest of us.

You see folks, I always look forward to the rich getting richer because during those years the rest of us tend to do better too. It is not a coincidence that in a year where the rich took a big hit, most of the rest of us did as well. In a moment, I want to give you some BARSTOOL Economics that is so accessible, so easy to understand, you will want every member of your family to hear it or read it. You will want to download the podcast, and you can find it by simply accessing our site, CharlesAdler.Com.

Now back to some BARSTOOL Economics 101.

Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:

The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.

So, that's what they decided to do.

The ten men drank in the bar every day and seemed quite happy with the arrangement, until on day, the owner threw them a curve. "Since you are all such good customers," he said, "I'm going to reduce the cost of your daily beer by $20." Drinks for the ten now cost just $80.

The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected. They would still drink for free. But what about the other six men - the paying customers? How could they divide the $20 windfall so that everyone would get his 'fair share?' They realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer. So, the bar owner suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay.

And so:

The fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33%savings).
The seventh now pay $5 instead of $7 (28%savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $49 instead of $59 (16% savings).

Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant, the men began to compare their savings.

"I only got a dollar out of the $20,"declared the sixth man. He pointed to the tenth man," but he got $10!"

"Yeah, that's right," exclaimed the fifth man. "I only saved a dollar, too. It's unfair that he got ten times more than I!"

"That's true!!" shouted the seventh man. "Why should he get $10 back when I got only two? The wealthy get all the breaks!"

"Wait a minute," yelled the first four men in unison. "We didn't get anything at all. The system exploits the poor!"

The nine men surrounded the tenth and beat him up.

The next night the tenth man didn't show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill!

And that, boys and girls, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.

Folks, that's your BARSTOOL Economics. I offer you this because in recent days you have heard a lot of empty nonsense about how if tax rates can be hiked on the rich money, more money will trickle down from the heavens for the rest of us. You have heard a lot of nonsense about how corporate taxes should not come down because that would only be assisting the rich. The reason I have no use - intellectually speaking - for Jack Layton's economics is because unlike BARSTOOL economics, his numbers don't add up. He and the Liberals sometimes lean in this direction especially in these times of high anxiety; they lean in the direction of wanting you to think that if only the government punishes the top two earners on those bar stools, Man Number Ten and Man Number Nine, it will be good for the other eight.

The folks who litter the mainstream media as pundits with their economics and sociology of envy and the politicians who do the same, are all counting on one thing, that you don't have a basic grounding in what we are calling BARSTOOL Economics. Log on to www.charlesadler.com
and get a written copy of this and later today on our podcast. Subscribe to Itunes and download my podcast into your IPOD. Get as many people you care about educated on this stuff. It's your best defense against the media and academic and political predators who appeal to your anxiety instead of your common sense. In the meantime, we need to hope and pray that the economy can start revving again, the way it needs to for us to have a prosperous middle class. How will we know things are working again? When the rich get richer.

They are the reverse of the canaries in the coal mine. When the canary is dropped down into the mine deep enough so that it cannot survive, we say it’s no place for coal miners to go. The Rich are my canaries in the gold mine. When they start smelling the gold, it starts to get golden for the rest of us. And so on behalf of us, I say, “We should hope that Bill Gates and Warren Buffet and the other members of the rich, have a very good year.” We should pray for the rich to get richer.

I'm Charles Adler on the Corus Radio Network.