The Billionaire Economy

 Yglesias makes a bullshit defense of billionaires - or more accurately, he erects some strawmen to knock down regarding anti-billionaire politics. It's true that many leftists and socialists have some nutty ideas about economics, and it you just go by the online posting of some of them, there are strawmen aplenty to attack.

The problem isn't exclusively billionaires and many billionaires are not exclusively evil people. The problem is that we have a system that tilts away from equality and towards plutocracy. The problem is that Republicans have stripped away campaign finance laws so that there is no way to regulate the millions that a billionaire can leverage to warp an election. This is fundamentally corrosive to democracy.

As Krugman points out, Republican policies purport to be "business friendly" but they are far more likely to hurt small business owners - many of whom vote Republican. The most obvious example is GOP hostility to the ACA, which many small business owners rely on. Tariffs are a new wrinkle created by Trump, but they are another policy that hurts small business owners.

I'd go further and note that rising inequality reduces consumer spending, which is an overall drag on the economy. How much of the recent GDP growth was simply building AI data centers and how much was consumer spending? One of the fundamental causes of the Great Depression was weak and narrow consumer spending. Demand fell, because whole segments of the economy had no disposable income. 

This seems to be the supply side argument of the so-called "Abundance" movement in the Democratic Party. Housing is a real problem and supply is part of it. (A sizable part of that supply issue is higher interest rates that freeze housing stock, but building more housing would be a net positive.) Reduce prices by increasing supply is not a crazy idea. There is the inevitable leftist pushback that Abundance doesn't solve everything, so what good is it really? 

Permitting reform is a good thing and not something that necessarily gores the oxen of Democratic constituencies. However, if you really want to increase housing stock, you very well need to fund it. If you want to help small businesses, you need to fund the ACA. If you want to develop a poorer region, you will need development funds.

That comes from taxes. I think we've reached a point where we need a far more aggressive and progressive capital gains tax regimen. We also need a wealth tax. 

One of Yglesias' arguments is that Elon Musk got rich by building something people need. The problem is that Musk is the richest man in the world not because Tesla makes the best or more affordable electric cars. They don't. He's the richest man in the world, because Tesla stock is ridiculously overvalued. Tesla makes money of its batteries, which are excellent, but Tesla is not a great automaker. Still, people think he's the future and are investing in Tesla stock accordingly. That seems, for lack of a better word, fake. 

What's more, that stock price - being inflated - absolutely should be taxed, especially if that tax money then turns around and funds the ACA or Medicaid or infrastructure or housing or whatever a society needs.