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Thread: Conversation with a rich uncle

  1. #1

    Default Conversation with a rich uncle

    So my uncle worked in a steel mill for most of his life, became an investor for about 5 years, and then decided to opened up a small grocery chain (3 stores) since he didn't know what to do with his time. He's almost 80 now, and I wanted to get his view on the economy.

    He said that becoming an investor taught him a lot about how the economy works, and said trickle down economics absolutely doesn't work, and that it was preposterous to think that somehow giving the rich more tax breaks equated to more jobs. He said that he lost a lot of money as an investor at first because he focused more on net income of companies rather than than sales. Companies used all kinds of tax tricks to save money, but the problem was no one was buying the products and services, and eventually the companies usually went under and my uncle lost a lot of money that way.

    He said when he opened his first grocery store, even though the store brought in a lot of money, there was no incentive to hire new employees. He said while his pockets kept getting fuller, his 8 or so employees made about $8.00, and he had no reason to hire anyone else because they did a fine job of keeping the store going. Then eventually he did open up two more grocery stores and hired more people, but he said that was more out of boredom than anything. He was perfectly content with his one grocery store.

    I'm not entirely sure how much money he has, but I know it's several million. For whatever reason, he votes democrat and says that he fully supports higher taxes on the rich and little to no taxes on anyone who makes below $80,000. This surprised me, and I asked him if he thought a voluntary tax system would work where the rich could pay as much as they wanted to. He said absolutely not, because up until a couple years ago, he wouldn't consider ever paying more because the more money you make, the greedier you become. But now he has such an excess of money, he's so old, and he doesn't really know what to do with his money. So he's satiated.

    I suggested that taxation is stealing since you had no choice to pay it. He said he believed taxation was necessary because people are not created equally, regardless of what people might say. He used to live in a one bedroom shack with my grandparents, my dad, and my other uncle, but he had the ambition to make a better life for himself. Not everyone has this kind ambition, and it's not something that you can just develop. He said he saw a lot of hardworking stupid people, and he saw a lot of intelligent lazy people in his life. He didn't feel that either person was at fault, but it was somewhat just in the cards that they would never achieve what others would be able to. He said some people just absolutely need to be cared for, and he'd rather live in a country that took care of its citizenry than allow a more Darwin approach.

    Anyway, I thought his view was pretty interesting, and it has kind of changed a lot of my views on the subject. Maybe there is no black and white. Maybe everything really is gray, and compromise is absolutely needed.
    Last edited by ShaneEnochs; 02-10-2013 at 09:26 AM.
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    Quote Originally Posted by jllundqu View Post
    god damn vipers, all of them.



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  3. #2
    Member roho76's Avatar
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    The "Darwinian" system in which he states, is the only system that doesn't allow for elitist fuckheads to rob those they feel are beneath them. Everyone is created equal. But sadly "equality" is represented by material assets. This mentality is a disease of the mind.
    Dishonest money makes for dishonest people.

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  4. #3

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    Quote Originally Posted by roho76 View Post
    The "Darwinian" system in which he states, is the only system that doesn't allow for elitist fuckheads to rob those they feel are beneath them. Everyone is created equal. But sadly "equality" is represented by material assets. This mentality is a disease of the mind.
    You believe everyone is born with the same opportunities?
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    Quote Originally Posted by jllundqu View Post
    god damn vipers, all of them.

  5. #4

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    Quote Originally Posted by ShaneEnochs View Post
    You believe everyone is born with the same opportunities?
    Do you believe taxation corrects that inequality?
    "We do have some differences and our approaches will be different, but that makes him his own person. I mean why should he [Rand] be a clone and do everything and think just exactly as I have. I think it's an opportunity to be independent minded. We are about 99% [the same on issues]." Ron Paul

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    Member Cleaner44's Avatar
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    Trickle down economics don't matter. That is just a Democrat talking point to argue against Reagan. It is irrelevant. People have a right to keep their property and forced redistribution by government taxation is simply immoral. Your uncle did not owe anyone a job and if he didn't want to open a 2nd store that is his prerogative. His millions would be much more productively put to use by him decided where he wants to donate them rather than the government taking them and redistributing to special interests. Let the rich uncles make their choice in a free market, not some crooked politician.
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  7. #6

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    Quote Originally Posted by ShaneEnochs View Post
    Maybe there is no black and white. Maybe everything really is gray, and compromise is absolutely needed.
    Nope, it is black and white really. Leaving money in private hands to be used in voluntary exchanges is better than sending it to bureaucrats.

    Ask your uncle how he thinks he was able to earn enough money to begin investing and buying grocery stores. It wasn't just his hard work and it certainly had nothing to do with the government. Ask him what he believe his excess production(profit) is doing to society and if it were taken from him, would society be better off?

    There is a lot of different ways in which he is misguided and not seeing the entire picture that I don't care to write about.

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    No person is entitled to take more from one person who has worked harder or whose father has worked harder or who was more fortunate , to give to another .Something Jefferson & I agree on. There are and always will be people in need .Something Jesus and I agree on. That is what private charity is for , not Govt.

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    It is black and white to me.
    Last edited by oyarde; 02-10-2013 at 12:14 PM.

  10. #9

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    The world is not black-and-white and to believe so is foolish in any subject matter. There is of course a moral high-ground in any comparison of concepts, but the physical world we live in with its layers upon layers of past human action requires some care to wade through. I can't comment on your uncle's triumph; my boss and I are currently going through the same thing with the store I work at and he's your average liberal and a nice guy. These guys aren't the problem.

    I mean...We understand that there are natural laws that are inalienable, but there are so many preconceptions in peoples' heads in the modern world that the natural order of things is kind of tainted and just to chip away at the bad parts and misinformation is to bring a spark of good. There is my vague and encompassing comment for the day haha!
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  11. #10

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    taxation and your uncle's wealth are two completely separate issues.

    Economically speaking.
    "I am, therefore I'll think" - Ayn Rand

  12. #11

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    Successful business men don't necessarily understand the economy any better than a usual worker. Managing a firm and understanding general economic activity have almost nothing in common.

    Von Mises was a great economist but there is no indication that he would have been a successful entrepreneur. Similarly, many billionaires have outlandish socialist views of the economy.

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    From the Internet EBounding's Avatar
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    Quote Originally Posted by ShaneEnochs View Post
    He said when he opened his first grocery store, even though the store brought in a lot of money, there was no incentive to hire new employees. He said while his pockets kept getting fuller, his 8 or so employees made about $8.00, and he had no reason to hire anyone else because they did a fine job of keeping the store going.
    Sounds like they should have asked for a raise. :P

    The thing is, we have a federal government that wants to eventually "take care" of everyone, not just the people who are worse off or don't have as much ambition. I would personally settle for a limited federal government, and let the states do the social caretaking. Of course, the states wouldn't be able to do much since they wouldn't have a money printing press.

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    Quote Originally Posted by EBounding View Post
    Sounds like they should have asked for a raise. :P

    The thing is, we have a federal government that wants to eventually "take care" of everyone, not just the people who are worse off or don't have as much ambition. I would personally settle for a limited federal government, and let the states do the social caretaking. Of course, the states wouldn't be able to do much since they wouldn't have a money printing press.
    It's a shame that the rich uncle did not see fit to reward his workers that helped him make his fortune. Even now the rich uncle could seek out those former employees and give them a wonderful gift, since he sees them as less able than himself. Certainly they are well deserving of his self-inflicted redistribution of his wealth. Instead his answer is to ask people in the government to take his money and then use it to purchase drones for killing children. To make it worse it seems that the uncle has guilt and wants to alleviative it by forcing his fellow wealthy citizens to have their money redistributed to the military industrial complex. All of this could have been avoided if he simply would have been a caring and generous person throughout his life rather than becoming greedier as he became wealthier.

    The whole thing reminds me of a typical violent asshole in prison that finds Jesus and then feels that everyone else needs to find Jesus because that is what help him turn his life around. It never occurs to him that most people aren't violent assholes and don't have that same need to turn their life around. I am happy that the prisoner stops being a violent asshole and if Jesus it what did it for him, great... more power to him. I just don't want some asshole telling me how to live life because he was doing it wrong for so long.
    Last edited by Cleaner44; 02-13-2013 at 06:56 AM. Reason: missing word
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    Supporting Member cjm's Avatar
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    Taking something that doesn't belong to you is wrong. That is black and white.

    Whether a particular person needs a handout or needs a kick in the pants is not always black and white. Reasonable people can agree to disagree here.



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    His reasoning is used to fight every war, jail every non-violent offender, and steal half my time and money every year. "People are not created equally"

    Initiating violence is wrong. I suggest that your uncle's morals aren't very good and you shouldn't let such a man persuade you. Many a mass grave were dug for the people not created equally.

  17. #16

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    Interesting that now that he is retired he wants huge income taxes? He is a thief or at least a symphathizer of thieves.

  18. #17

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    Quote Originally Posted by fr33 View Post
    His reasoning is used to fight every war, jail every non-violent offender, and steal half my time and money every year. "People are not created equally"

    Initiating violence is wrong. I suggest that your uncle's morals aren't very good and you shouldn't let such a man persuade you. Many a mass grave were dug for the people not created equally.
    No you're definitely right there. He was absolutely cut throat. My dad always told me that my uncle had mafia dealings. I still thought it was an interesting perspective.
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    Quote Originally Posted by jllundqu View Post
    god damn vipers, all of them.

  19. #18

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    Quote Originally Posted by ShaneEnochs View Post
    No you're definitely right there. He was absolutely cut throat. My dad always told me that my uncle had mafia dealings. I still thought it was an interesting perspective.
    I wonder how he would feel if the old man were mugged on the street. Would that be an interesting perspective?

  20. #19

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    ShaneEnochs,

    The way I heard it used to work was that the person that put up the money would get a fifty percent share of the profits and those that provided the labor would split up the other fifty percent. Of course if your Uncle provided some of the labor that should have been taken into account.

    I think we have strayed way off of a fair business model.

  21. #20

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    Quote Originally Posted by EBounding View Post
    Sounds like they should have asked for a raise. :P

    The thing is, we have a federal government that wants to eventually "take care" of everyone, not just the people who are worse off or don't have as much ambition. I would personally settle for a limited federal government, and let the states do the social caretaking. Of course, the states wouldn't be able to do much since they wouldn't have a money printing press.
    Or opened their own stores.

    Or went in together on one for that matter.
    Last edited by Carson; 02-10-2013 at 07:13 PM.

  22. #21

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    The rich uncle isn't very bright.

    Doing Good, or Helping doesn't have to go through the government. He could set up a scholarship fund for his employees, give them a bonus. He could even invest it in some technology company researching some important work.

    Taxation, government redistribution, etc... add up the sum total of that benefit, and compare it to the benefits brought about by research, new technology, medicines, etc... IT's easily 10000 times better to give/invest money to try to solve a problem instead of bandaging a problem via government.

    You know if the government wasn't taking as much in taxes from me, I'd still put it to use, some would be invested, some would be spent right now, etc.... we'd be creating a lot more constructive solutions (increased investment), instead of patchwork solutions and destructive ones (Wars, threat of wars).


    Anyway, if anything the size and scope of our government, IMO, is slowing the rate of progress to things like a "cure for cancer', 'better alternative energies', et... Why simply because like in my case, I have to buy and invest at a slower rate than I wiould if the tax rate was lower, like I'd probably have bought the 6000 dollar inverter/charger/ I've been eyeing, and I probably have redone the outside of this house by now, which would mean more constructive jobs, meaning more people that want to work would be working.

    As far as the lazy that refuse to work, I've no problem letting them die. Really, Essentially a person like that is putting a gun to their own head and saying 'give me your money or I'll pull the trigger', essentially forcing you to work for them. Screw that.

  23. #22

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    Quote Originally Posted by EBounding View Post
    Sounds like they should have asked for a raise. :P

    The thing is, we have a federal government that wants to eventually "take care" of everyone, not just the people who are worse off or don't have as much ambition. I would personally settle for a limited federal government, and let the states do the social caretaking. Of course, the states wouldn't be able to do much since they wouldn't have a money printing press.
    They want to decide who to take care of. (Gay marriage, not mormon marriage.)
    Thye want to decide who gets taken care of more, and who get taken care of less. (Federal pensions for federal workers.)
    They wnat to decide when someone should not be taken care of (death panels)
    They want to decide when someone should be punished when they have done something which they could not control (bloomberg soda ban, tax for bad health behavior)
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  24. #23

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    Quote Originally Posted by ShaneEnochs View Post
    He said when he opened his first grocery store, even though the store brought in a lot of money, there was no incentive to hire new employees. He said while his pockets kept getting fuller, his 8 or so employees made about $8.00, and he had no reason to hire anyone else because they did a fine job of keeping the store going.
    "*Successful* entrepreneurs aren't the concern. They have already made money and already created jobs. In economic terms, they are kind of a sunk cost. What matters are the entrepreneur wanna-bes. These are the people who will create new jobs. They aren't yet rich, so they don't show up among the "rich entrepreneurs" who say that taxes don't matter. They also haven't yet taken on the risk that leads to job creation. In deciding whether or not to take on entrepreneurial risk, they will balance the risk against the expected after-tax return. The higher the tax rate, the less likely they will be to take on risk and so the less likely they will be to create jobs.

    In short, when it comes to creating jobs the "don't tax the rich" argument is less about the effect on the existing rich and much more about the effect on the might-be-in-the-future rich." --Antony Davies
    Last edited by archangel689; 02-11-2013 at 08:59 AM.





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