On Robin Hood - a Review

People have a lot of messed up feelings about money. Animals have an instinctual need to hoard resources. Usually that’s food. That’s why squirrels bury nuts, dogs eat like it is their last meal on earth, and we ask for to-go-boxes for one slice of pizza and half a slice of cake.

Resources are either finite or infinite. But even the infinite ones aren’t actually infinite. Under capitalism, they are mined, extracted, refined, and turned into something you can buy. This counts for electricity, homes, water, food, you know, basic stuff we need to live.

And unless you’re living off grid, we get all of these resources with our paycheck. In many ways money IS electricity, money IS shelter, money IS food/water. So, we hoard it. We have saving accounts, investments, we fight for raises, we pick up quarters off the floor. It’s just common cents.

For the overwhelming majority of people alive right now, money is a major stress for them. They don’t have enough, or won’t have enough if one thing goes wrong. They think about it constantly and are worried about it. For many people, earning money is their primary motivator.

There’s an interesting social phenomenon about people becoming workaholics after having kids. Their biological imperative is to work harder to provide more resources for their child after they are born, and so they work harder, fight for promotions, get a side gig. But in doing so they end up spending less actual time with their kid. People who have children tend to get promoted or fired more often.

This mirrors many other problems money brings into society. We tend to become so infatuated with earning more that our whole life becomes that pursuit. If that makes you happy, I’m not trying to take that from you, but your enjoyment in that pursuit probably feels a little strange when you think about the billions of people who lack money and break their backs with work to try and escape whatever hole society left them in, especially if “making money” is one of your hobbies.

I guess this brings up two important points I need to mention: privilege and blame.

I am privileged. My family is doing very well. It wasn’t always. My parents worked really hard and provided amazing safety nets for me. They encouraged my education and paid for it. I got a degree that is hard to find work in and then was able to find a job in my field that pays higher than average. I was only able to gain experience for that job because I was able to live at home with my parents and make less than $5,000 a year gaining experience and working for exposure/little-to-no money (I love to work freelance). Internships are great ways to get your foot in the door, but they are only available to people who have some sort of replacement for the income they’re not getting. And while I didn’t really have an internship, I did have a family who provided for me while I did a lot of on-the-job learning while making well below minimum wage.

People who come from less affluent backgrounds cannot do that. Or if they do, they have to pay for it all themselves (which usually means having multiple jobs, which means most of their waking hours is devoted to making money).

Blame is really tough. A lot of people have made dumb choices and it has put them in a financial hole. I think we all know one or two people who are frivolous with money they don’t have or who can never hold down a job. And while maybe those people could change, I think it’s important to think how crazy it is that we all know someone like that.

If there is a pattern in society, do we blame the people in the pattern, or do we blame the pattern? Personally, I like inventing a big evil bad guy and rooting for the little guy. So I’m blaming the pattern.

If you don’t grow up with money, but suddenly have a decent paying job, you often might have trouble knowing what to do with all that cash. From there you can develop really bad habits or live beyond your means, or what have you. $40,000 a year sounds like a lot until you realize taxes, insurance, rent, and food take 50-70% of that. And while many people learn that the hard way, some people learn it an even harder way and end up in a cycle of debt.

Debt is the modern equivalent of a trope in fiction known as “the witch’s curse.” If you’re stupid when you’re 20 and spend too frivolously or get a college degree or buy a car or get sick, there’s a good chance you’ll have debt for at least 10 years. If not more.

The curse can only be broken if you do something miraculous. AKA make a lot of money. But it is really hard to make money if you don’t already have money and you owe a large debt that you’re constantly repaying.

The beast a la the film Beastly (or the better metaphor, Beauty and the Beast) can only be freed from his curse if he finds love. But it’s really hard for him to find love because he is “ugly” and therefore inapproachable. Of course, most of the movie is him learning that the ugly inside of him is a bigger turn-off than the ugliness on the outside, but at the same time, it would help a lot if he was pretty and could make a better first impression.

In this metaphor your savings account is the internal ugliness you have to fix. Except, you can’t fix that without getting rid of the debt. So maybe it’s a bad metaphor.

Most people who fall into debt one time, do it again. And again. And again. The system becomes nearly inescapable, but that isn’t just because they are “bad with money.”

When I got a medical bill sent to me for $30,000, I fell into despair. I didn’t want to do anything, I definitely didn’t want to work harder than I already was. That’s actually when my weekly blogs stopped. I was too depressed to write!

Luckily, it turned out that bill was from a scam artist. But! It also turned out I had a lot of health issues. Thankfully I was very good about saving my money and basically never bought anything, and had a decent salary (despite being a teacher), so I was able to save and never owe more than I could pay.

My total health care costs since 2019, before insurance (with adjusted pricing) are around $200,000. With insurance, I have paid probably $11,000. Note that I was picked up by an ambulance once and spent a few hours in the ER, had three normal procedures, and one very expensive procedure. If we drop the expensive procedure it is still $8,000 over 5 years.

So, if you’re uninsured and don’t have a great job, one trip to the doctors office could ruin your life. If you get into a car accident, that could ruin your life. If you have to move and your rent increases, that could ruin your life. If you get fired or laid off or have your hours reduced, that could ruin your life.

A lot of people live on the knife’s edge, one missed paycheck or bad break means they can’t pay rent and they could get evicted. Most people don’t have a fallback plan if they lose their home, meaning they end up on the streets. And it’s hard to keep your job or pay off your interest if you don’t have a house.

And I guess I have to ask. Is that fair? Can we blame them?

Personally, I don’t think so.

Back to the concept of money again.

Ask yourself, is money a finite or infinite resource?

While the amount of wealth goes up year after year, the price of goods does too. A dollar today isn’t the same as a dollar, fifty years ago. Inflation!

Inflation is necessary because we buy things that get “used up.” We spend $1.50 on a kit kat, we eat the kit kat. That $1.50 doesn’t go away, it goes to Amazon/Target/Walmart and is dispersed to savings accounts across the globe. And then those businesses use that money to pay their staff, buy more inventory, and line the pockets of people who have more money than God and so on. But the kit kat is gone. It no longer has value (unless you have big plans for that wrapper).

So, which is it? Infinite or finite? This is actually a debate economists have, but most treat it as a finite resource for individuals, but an infinite resource for nations (and some businesses, which is so crazy). So, let’s just call it finite since none of us are representatives for a major nation or CEOs of money printing organizations.

That means when you find a quarter, that’s 25 cents no one else will have until you spend it. When you get your paycheck, that’s money no one else has. If you squirrel any of that away. Either by burying it in the yard or putting it into a bank account, that money is not in circulation (yes I understand that banks can leverage your money for investments and that interest accrues, but that’s basically not real, and if you don’t believe me just wait a second).

For the most part, people putting money into their savings accounts does not have any impact on the economy. But there are some people who do!

Jeff Bezos for example, makes around $10 billion a year. If he put half of that into a savings account, that is $5 billion dollars plucked out of the economy. So, just based off simple supply and demand, that’s less money to buy kit kats, less money for you, and less money for me. And I want that money.

Historically, it has been admirable to make a lot of money. Obviously, if you do it in a bad way, we think less of you. But if you make a lot of money in a cool way, like by inventing something, society will respect you. That is changing a bit. Hoarding massive amounts of wealth is no longer a universal virtue, hopefully that paradigm shift happens quick so we can start sharing a bit more.

This doesn’t apply to normal people. Just the ultra-rich. The people who have more than a hundred million dollars to play with.

So anyway. $5,000,000,000 removed from the economy in a single year is a lot. It gets even weirder when you realize there are trillionaires who can move a trillion dollars out of the economy in a given year without even thinking about it.

By taking money out of the economy, interest rates go up. Because money has more value (less supply, more demand. More demand, more value). That’s good for people who have a lot of money invested or in savings accounts, it is not so good for people trying to get out of debt or to buy a home.

And money cannot be spent all in one place. A trillionaire even would struggle spending all their wealth in one day. There is only so much stuff to buy. So, it gets buried in the yard and will probably never see the light of day.

If that trillion dollars went instead into, I don’t know, the pockets of the people actually doing the hard labor to make the money, then you could pay every single Amazon employee $641,025 (1 trillion divided by 1.54 million employees). That would be a nice Christmas bonus Jeff!

Could you imagine what would happen if corporations shared their massive wealth, rather than funnel it entirely to the C level executives? I can’t imagine anyone in America ever doing that!

Many American corporations in the 50s to the 70s did this.

General Electric is the most famous company to offer incentives to employees based on company performance. They paid every employee extra based on their profits. It was cool, it was rad, one greedy dude ruined it. Drew Gooden (the “road work ahead”) guy from Vine made a video about this recently. So I don’t want to go over the same thing.

This is why so much of today’s wealth is tied up in the baby boomer generation. They were paid more and got better benefits. The executives of these massive companies removed the incentive programs during the 1980s, which was a good decade for the economy.

Wait, sorry. The 1980s were a terrible decade for the economy. The 90s were OK. The 2000s were… yikes. 2010 started OK! 2017 was when the trouble began again. Then the pandemic. Then it was OK for a moment. Now it sucks. Well. Unless you’re part of the rich upper class.

This is the source of a huge hole in American’s hearts. The money is drying up and things are more expensive. This is why populism and appeals to affordability are driving political discourse right now. This is why we want to see the rich guys lose.

As a side note. During the “golden era” of US business, when you could actually make money consistently, most of the people able to get high paying jobs at these incentive driven companies were white men. Just something I noticed.

On a sider note. Have you noticed how everything is an investment these days? Houses are investments. Black rock even buys houses. I guess that kind of makes sense, but… Concert tickets? Pokemon cards? Shoes. Purses. Legos. Disney Merchandise. It’s just so interesting how much grifting is going on in spaces that are meant to be “fun.”

Back to it.

The main thing all of this is going toward is stocks.

What are stocks. Honestly, can you define it? If you put $100 in Nvidia, does that money go toward making new chips? When you sell 1 stock in Boeing, who is paying you the $200? Is it Boeing? And how did we decide Boeing stocks cost $200? 

I’m seriously asking these questions because 1. I didn’t know the exact answer until today and 2. I’m willing to bet most people don’t really know! (Not the people who read my blogs though, you’re all very smart!)

Stocks are gambling. When you buy a stock, you’re hoping that in the future, people will value that stock higher than what you paid. That stock does represent ownership in a corporation. If you buy 1 Boeing stock, you own 1/700,000,000th of the company. It is more complicated than that, but. It isn’t relevant.

Many corporations have shareholder meetings were the majority owners of a stock come together and vote/make decisions as a group. But that’s relatively new and also a terrible idea.

Shareholders have one incentive: make the line go up. But they do not care if that line goes up indefinitely, they want it to go up high enough so that they can sell it for a nice profit.

Much of America’s money is tied up in these stocks. Most 401ks, IRAs, banks, and rich people have their money invested in this huge roulette wheel.

Some stocks are public, some are private. This is where private equity comes in. Usually when a business is purchased by private equity, it tanks and falls apart. E.g., Chuck E. Cheese. Once again, this is because they don’t care about making a good business, they care about extracting value.

In some cases, the profits of the business are split among the people with equity. This can happen in the form of dividends. This is not common. Businesses who share equity tend to have happier employees and last longer and are more resistant to market pressures. Their stocks also tend to be heavily inflated and the board members tend to have more control. This can be good, this can be bad.

I also want you to consider taxes. Nothing gets an American more excited than taxes. Do you feel like yours are too high? We often talk about how people like Jeff Bezos and Mark Zuckerberg pay virtually zero dollars in taxes. Then we get mired in the discussion of loopholes and the stock market.

One of the biggest traps in debating the loopholes these trillionaires use is that “we can’t close the loophole or increase capital gains taxes because the middle class can only generate more wealth via capital gains.” This is wrong for a few reasons:

1. If rich people paid more in taxes, there is a world in which you would pay less (more money in the government means better infrastructure, more jobs, more money in the economy, lower prices for goods, etc.)

2. Rich people would have less of an incentive to hoard wealth and would be more incentivized to actually pay their employees more.

3. The actual loophole, the borrowing/buy borrow die loophole both lead the richest people in the world to pay about 1% of their annual income in taxes. An average earning household with two full-time workers pays just as much as billionaires do in taxes. That household puts a higher percent of their wealth in circulation than most billionaires. More money in circulation = lower interest rates = lower prices = a stronger economy.

4. We could just write the law so that it doesn’t affect/hurt people who make less than ten million a year and it would still put billions into the economy and would not affect 97% of the population.

I want to obviously make it clear, I am not an economist. I don’t know a lot about money, I sometimes use my fingers to count. But right now, the US economy is driven mainly by consumers buying and selling things. But if the money isn’t going toward consuming and is moving toward speculation, what does that mean for the people who don’t have nuts buried in the yard?

And what does it mean for the 1% of people who have 50% of the nuts.

I don’t know enough to know. I just see the writing on the wall and it says “not good Cotton.”

Currently, the economy is “in the green,” the line is going up. But when you talk to the average person (you know, the majority of people in our country), they will tell you things are too expensive. They are making less money. They cannot afford a home. They struggle about money.

This difference in perception boils down to one thing, that green line. While it goes up, some people get more money, but that means others have less. There’s a way where that line can go up and everyone can benefit, but it just isn’t happening. The way our economy is built, we incentivize wealthy individuals to hoard wealth, we incentivize dividing America, and we ruin lives to make some people’s lives 3% better year over year (compounding).

That all being said, the metaphorical icebergs are melting!* More and more people are seeing what’s going on and realizing, hold on. How much money does that guy have? 1% of people should not own 50% of the stock market. People want change. They don’t know how to find it. But they want it! That’s how we wound up with our current President. And it’s going to certainly decide who is going to be the next one.

If things go the way I hope they do, and we see real change, we could shake off this yoke and start investing in everyone again. There are many smart minds thinking about these problems, we just need to get them behind the wheel.

If you want ideas on how to start making a difference, consider the following:

Think about where you shop and who is getting the money you’re spending.

Think about how you invest (if you can afford to).

Think about your community, and things you can do to help out or get help! While bureaucracy has made my life hell many times, it has also saved me. That scam doctor had their practice closed down due to an insurance fraud investigation done by the local government. Another inflated bill I had (due to insurance shenanigans) was lowered because the state of California Insurance Board appointed me an attorney who was a genius about this stuff and got an out of network $11,000 bill moved in network and reduced to $800.

Think about safety nets, and if you can share yours (without hurting your own chances).

And finally, vote. Research and vote. Vote in every election. Email representatives. Speak your mind!  

*Probably could have gone with a more tactful metaphor here.

Oh, and about the title. In 1953, during a red scare, the book “Robin Hood” was attempted to be banned and Robin Hood the character was labeled a communist by McCarthy. After the banning of the book, there was a protest called “The Green Feather Movement” started by college students. These students were all Baptists. They saw Robin Hood as part of a greater Christian mythos of providing to the poor/meek/etc.

The movement was not successful in Indiana, but it spread to other campuses and is considered one of the first “modern” college protests in the USA. Robin Hood was not banned. College protests are sort of infamous in America, but if you pay attention to their cause, they often become bigger deals in America at large.

This is interesting and started me down the research path that eventually became this blog.

Also. I’m not an economist, if I got some of this stuff wrong. I can change it. I understand a few hours of research makes me more fallible, not less, and I want to know if I’m wrong, because obviously I care about this stuff.