Jodie Foster and the Wealth Hoarding Fallacy

Jodie Foster has a net worth of $100 million dollars, and since she doesn't make $100 million dollars a film isn't she then hoarding that money, which, according to her argument means SHE is the cause of poverty.

Much of this argument stems from the mistaken belief that there is a fixed, static amount of money.

“Most economic fallacies derive from the tendency to assume that there is a fixed pie, that one party can gain only at the expense of another.” ~Milton Friedman

There is about 80 trillion dollars of GDP wealth in the world today, while in 1960 it was only 1.37 Trillion. How is this possible if the pie is fixed? There was never a small static pie, the free exchange of capitalism generates wealth for all who participate and thus makes the pie bigger.

Also Donald Trump's wealth has no impact on what you or I make in a year. There is not a fixed money supply jar that is going to run out when rich people take it all. As long as someone wants something and another has a means to provide it, money will be the medium of exchange between them.

But what about Hoarding Money? If by hoarding you mean storing money under your mattress or burying it in your backyard, then this is silly. If this was so then they would be getting poorer every day due to inflation and our government printing more money. There is a reason a can of cola used to cost me 10 cents when I was a kid. Hoarding that 10 cents in my closet for decades made it worth much less over time. Rich people aren't rich because they're stupid.

If by hoarding money you mean keeping it in the bank, then you need to know what a bank does.  A bank does not sit on your money.  Banks invest that money in others so that they can create more wealth. The business or individual that borrows money from the bank, either to buy a house or a car, let's say, then pays the money back, plus interest. So hoarding in this fashion is good for the community at large.

Let's say a hoarder burns all of his money, then the existing money in the poor man's pocket is now worth more because the amount of money in circulation is reduced and less money means lower prices which is good for the 99 percent of us.

What then about off-shore accounts? Today the biggest threat to your savings is your own government. Governments are going deeper into insolvency and as a result we are now seeing bail-ins (like they have done in Cyprus), bank deposit taxes (Spain), the  nationalization of retirement savings (Poland, Hungary, Portugal, Argentina), and capital controls.

As Judge Andrew Napolitano says: "The people who have more than $100,000 in the bank are targets for any government that’s looking for money to shore up its own inability to manage its finances." https://www.youtube.com/watch?v=nGDlgVK73Q4

With that threat in place it makes it prudent for people to protect their families' wealth by moving their money around. Also, offshore accounts offer much higher interest rates than what you’d find at home, where rates are kept historically low by the European Central Bank and the Federal Reserve.

Finally, throwing money at poverty does not seem to work anyways. The American government spent 22 Trillion dollars (yes, 22,000,000,000,000) in the past 50 years and the poverty rate has remained unchanged and by doing so they have created a permanent underclass. Perhaps we should spend more time educating people to learn useful trades and skills and we should also clamor for less barriers to entry into business, like intrusive minimum wage laws, regulations and licensing.

As Bono once said at Georgetown: “Aid is just a stop-gap. Commerce [and] entrepreneurial capitalism takes more people out of poverty than aid. In dealing with poverty here and around the world, welfare and foreign aid are a Band-Aid. Free enterprise is a cure. Entrepreneurship is the most sure way of development.”

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