I recently read The Everywhere Millionaire: Who Is Really Rich in America and How They Got There by economists Eric Zwick and Owen Zidar, and I was left wondering something.
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I → read → something
Have the book’s own authors done the same?
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authors → do → same
At its core, the book includes dozens of supportive profiles of people who built up great family businesses, often in the most unlikely of places and industries.
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who → include → places
Who knew you could start a billion-dollar business with a hot dog cart in a parking lot?
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you → know → lot
The founder of the Chicago restaurant chain Portillo’s did that.
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founder → do → that
Other fun profiles include Buc-ees, Outback Steakhouse, and Bass Pro Shops.
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profiles → include → ees
The founders of these businesses, meanwhile, come in all shapes and sizes — college graduates, dropouts, immigrants, Native Americans.
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founders → come → shapes
Just about every class and color is represented.
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class → represent → ?
It’s a veritable melting pot of entrepreneurialism.
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It → ’ → entrepreneurialism
It helps that the profiles are free of the smug, “you didn’t build this” attitude of former President Barack Obama.
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you → help → Obama
These people clearly did build this, often overcoming tremendous odds to construct enterprises that form the very fabric of our economy.
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that → build → economy
The authors observe: “For every member of the Forbes 400, more than four thousand private business owners each have at least $10 million in net worth.
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owners → observe → worth
For every large public company CEO, more than one thousand private business owners each have at least $25 million in wealth.
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owners → have → wealth
That observation underpins our premise that the strength of America lies in Main Street, where the massive financial weight of millions of large, debt-free enterprises offers both jobs and a mature counterbalance to the “which bubble should we invest in next” attitude so prevalent on the coasts.
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we → underpin → coasts
Having built up the Main Street community, however, the authors jolt the reader with a hard pivot from Horatio Alger to Sen. Bernie Sanders (I-VT), asking: “Does the rise of Main Street Millionaires prove that the American dream is alive and well?
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dream → build → Millionaires
Or are these new millionaires seizing too much of the fruits of our economic growth, squelching the hopes and opportunities of almost everyone else?
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millionaires → seize → everyone
I’m sorry, whose economic growth?
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I → ’m → ?
Did they miss the part where they described exactly where the growth came from?
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growth → miss → where
Meanwhile, the only visible squelching was the parts department manager who didn’t like being demoted to make room for a bunch of nepo babies.
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who → like → babies
He promptly squelched that plan by building a more successful, competing business.
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He → squelch → business
Sure, you built a billion-dollar business out of nothing, employed thousands of workers, and provided services and products people obviously want, but did you know some overpaid French economists think income inequality has gotten worse?
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inequality → build → services
It’s all very odd and unconvincing.
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It → ’ → ?
It’s also well-trod ground.
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It → ’ → ?
Pass-throughs have been inaccurately blamed for income inequality for years, missing the basic truth that they are the solution to the inequality challenge.
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they → blame → challenge
As the book makes clear, there’s no better path from poverty to success than starting your own business.
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book → make → business
Then there is an entire chapter in which the authors applaud economic consolidation as private equity investors engage in widespread leveraged buyouts of Main Street businesses.
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investors → be → businesses
They write: ”As PE’s reach continues to grow in the middle market, it will continue to provide succession plans for business owners and needed cash for their businesses, helping them prosper well into the future.”
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them → write → future
Let’s see how well that statement ages.
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statement → let → ?
As Warren Buffett noted, “Only when the tide goes out do you discover who’s been swimming naked.”
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who → note → ?
Other chapters critically highlight how pass-through business owners are politically active, underpay their employees, and pay less than other taxpayer groups.
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owners → highlight → groups
This paragraph pretty much sums it up: “Main Street Millionaires work hard and contribute significantly to the economy.
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Millionaires → sum → economy
But they also pay less in taxes than they should, and they sometimes take shortcuts to get rich.
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they → pay → shortcuts
We can admire them for their success and still think they should give more back to the country that helped make their success possible.”
You’ll find little support for any of this in the book.
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You → admire → book
The authors reference a database they built working with the IRS but never use it to calculate how much tax pass-throughs actually pay.
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throughs → reference → much
Because it’s more than you think.
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you → ’ → ?
Pass-through income is a large portion of top U.S. income shares, and top income earners pay almost all the federal individual income taxes.
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earners → pass → taxes
Our own work shows that large S corporations pay the highest rates of any business structure.
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corporations → show → structure
When progressives write about wealth, you can almost hear Robin Leach in the background, nasaling on incessantly about fancy weddings — the book opens and closes with one — private jets, yachts, and other tropes of overconsumption.
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book → write → overconsumption
One wedding, however, does not define a community that includes millions of businesses and owners.
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that → define → businesses
That’s the most frustrating aspect of the book — there’s lots of good here, it’s just that the authors’ obvious political biases can’t let the data and anecdotes stand on their own.
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data → ’ → own
…and 3 more, not listed.
The Aporia
