Guns, masks, and money: The real meaning of freedom

A few weeks ago, I was at a heavy metal concert near Miami and one of my friends, from a band, was waxing philosophical. He was carrying 2 guns (so, Marcelo, don’t worry, I can protect you) and was not wearing a mask. Total freedom.

I had half a dozen simultaneous thoughts about this, but they all boil down to this: The government and the upper classes have convinced middle class America that "freedom" is “not wearing a mask” and carrying a gun.

That is bullshit.

Money is the real freedom. The more the better. So, there is a huge incentive for the upper classes to prevent the middle and lower ones from having it.

Money will buy you political reform, impunity from pesky regulations and, in general, the ability to do whatever you want.

And, with a GINI coefficient of 0.484 in 2021 it shows you just how successful the misdirection campaign has been.

So, let’s talk about money, wealth, freedom and brainwashing.

According to Statista, in the 3Q 2021 the share of net wealth held by the top 10% was 69.6% of the country’s net wealth.

The richer get richer faster: According to the Census Bureau, the typical family saw its income grow from $58,000 in 1989 to $69,000 (19%) in 2019, after adjusting for inflation. A family at the 80th percentile saw its income grow almost twice as quickly, from $107,000 to $143,000 (34%).

All told, the top quintile increased its share of national income by 9 percentage points over the past 50 years and now earns the majority of the nation’s income. All other quintiles saw their shares decline, with the middle quintile’s 3-point loss the largest.

Higher income translates to greater disposable income and thus a greater opportunity for saving and investing:

• Households earning $50–70K save just $1,000 per year.
• Those earning $70–90K save almost 10 times more.
• Those earning $100–150K save 20 times more.

?There are reams of data that could be downloaded here, but, bottom line:

• ?The rich in the US are disproportionally rich both in income and net wealth
• Rich homes get rich faster
• Their added wealth allows them to save and invest 10 and 20 times more than median home

Oh, but if you work hard, you can make it to the top! Maybe. Actually, a strong maybe, but, economic mobility is pretty low too. According to a huge article published in the New York Times:

• Only 17% of Black boys growing up in a rich household wind up rich themselves; 22% wind up poor. In contract, 39% of White boys growing up in a rich household wind up rich themselves, only 10% wind up poor.
• Only 19% of White children (M+F) growing up in middle class homes wind up rich; 15% wind up being poor. 32% of Asian American children growing up the same wind up being rich, 12% wind up being poor (though the differences level up when “native” vs. “foreign” born are divided.
• Of children (M+F) who grew up in middle class homes:
• 39% of Whites wind up rich
• 17% of Black
• 29% of Hispanics
• 46% of Asian

There is upward mobility… just not a lot of it.

Most people make money working at a 9-5 job.

In my experience, money is best accumulated by working high paying jobs and the easiest way to get into high paying jobs is through education. The government has made the lower and middle classes believe that free or really cheap education is "communism" and have even created an anti-education sentiment by calling anyone educated "woke".

The second thing, again, my experience, I could be wrong (but I don't think so) that helps working people is to not have to pay $500 or $1,000 a month in health insurance. Not only would a free or really cheap national health insurance liberate money that could be invested, but it would also take care of 75% or 80% of your day to day problems. The government and upper classes make everyone else believe that a state-owned health insurance program would be (1) communist and (2) badly run.

I am a product of that "communism". Spain provided basically free education (my master’s degree was essentially free) and free health care. As a result, I've been heavily investing since I was 24. My master’s helped me land jobs that were higher paying (and more fun) which allowed me to invest even more...

The American commitment to education dies in 12th grade. After that –a product of post WW2 needs—the person is left on their own.

My suggestion:

Approach education from a multi-faceted point of view and not a “one size fits all” approach.

• Offer all the kids graduating in the upper 1/3 of their class in senior year one free year at a community college. If they take it, the rules are simple: maintain a 3.7 or better or the free ride is over. Some will fail, some will not, but we are bound to wind up with a fantastic group of bright people who will help solve the many problems facing society.
• Offer everyone else the following: a free initial year in a vocational school (not all learning is university) or free remote online learning. This remote learning would be created, at the government’s expense, from courses created by different universities and offered via a platform like YouTube. The courses would be graded, and there would be a diploma at the end.

Approach health insurance like triage.

If, say, 75% of anyone’s problems are infections, broken bones, burns, and similar, have a free (or almost free) national health insurance to cover these cases. People would be free to buy more expensive plans, of course, that would cover more. But if an average household paid, say $100/month, that would first, generate a vast amount of money and second, free a considerable amount of money for savings and investing.

Second, make way better use of telemedicine. If your child has a fever, for example, reach a tele-doctor, explain the symptoms, and if you need a special medication, the same doctor can send an order to the nearest CVS, Walmart, or Target. All of the mechanisms already exist and are used to a lesser or greater degree. All we need to do is get people to accept that this works for 75% of their problems.

If the person needs to visit a doctor in person (e.g., burns, broken bones) there are plenty of Minute Stores or similar in CVS, Walmart, Target, and other stores to take care of the more mundane ones.

One conclusion: if you are even upper middle class or lower, you should reconsider your worldview. The wealth gap in the US is bigger than it has ever been. Social mobility is low. Your chances of improving your life are becoming scarcer. Be more selfish, demand change, vote for those who will institute programs that will benefit you.

Goldman Sachs paid its CEO David Solomon $35 million in 2021. Morgan Stanley paid James Gorman $35 million. JPMorgan paid Jamie Dimon $34.5 million. Since the beginning of the pandemic in 2020, American households in this teensy tiny slice of society have increased their income by about 8%. In contrast, the households in the bottom half of U.S. earners— those with an average disposable income of about $35,000 — have increased their annual take by about 0.8 percent.

But, hey, keep believing "freedom" is not wearing a mask and carrying a gun...

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Some sources:

https://www.nytimes.com/interactive/2018/03/27/upshot/make-your-own-mobility-animation.html

https://www.nytimes.com/interactive/2018/03/19/upshot/race-class-white-and-black-men.html

https://opportunityinsights.org/

https://americancompass.org

https://realtimeinequality.org/

https://financebuzz.com/us-net-worth-statistics

https://www.cnbc.com/2021/06/23/how-much-wealth-top-1percent-of-americans-have.html

https://www.worldpopulationreview.com

https://www.statista.com