Current Opinions: 11/19/14 (Click HERE for Archived Opinions):
I don't collect things. I have friends who make their livings from collectibles, and I understand the market for them, but I have a hard time wrapping my mind around what it is that makes them valuable.
Some people collect things for sentimental reasons. They liked Mr. Magoo as kids, or Stan Musial was their favorite baseball player, or some other reason. This, I understand. The items they collect give them pleasure, so they buy them for the same reason others buy pleasurable stuff, self-gratification.
Others collect things as investments. This is harder for me to comprehend. Who's to say that a Honus Wagner baseball card will remain valuable despite its scarcity? What quality, other than rarity, does a diamond--glorified carbon--have that makes it valuable. Synthetic gems can be made to appear more pleasant than the real thing, yet they have no value.
Then, there are those who collect things from ego. They buy stuff so no one else can say they have it.
This last category is the one I find most baffling, which is why I nearly burst a blood vessel when I learned that a recent auction of Andy Warhol art had fetched nearly a billion dollars (with a b), including more than $82 million for a single sketch of Elvis Presley swiveling his hips. I saw the piece, and it was basically a doodle. What made it worth $82 million? The fact that Andy Warhol is dead, I suppose, and that it was a 'one of a kind' piece of art. But the trump card to such arguments is always this: Someone was willing to pay it.
Look, I get accused of being a socialist with some regularity, but I'm really not... at least I don't think I am.
Nonetheless, the first thought that leaped to my mind when I heard the otherworldly figures was "How many needy people could you help with that kind of money? And wouldn't you feel more satisfaction from establishing a charitable foundation than from having Andy Warhol's back-of-a-napkin scribble hanging on your wall?"
To me, it illustrates the lie of 'trickle-down' economics, which these days is more often referred to as 'job-creation.'
The ultra-wealthy can't pay even a dime more in taxes, but they can blow $82 million for a scrap of canvas depicting a pop star? I have to wonder how many jobs that particular sale created.
One look at my checkbook would tell you that I am not a financial expert by any stretch of the imagination, and the truth of the matter is that our 'small business' scarcely generates enough profit to eke out a meager subsistence for our family. But I'm not an idiot, and I have a pretty fair intuition for human nature. I don't for a minute buy into the fact that rich people will invest in private enterprise simply by virtue of having the ability to do so. Investments are encouraged by the market for a particular good or product. No one will invest in manufacturing a product that no one is interested in buying. I remember at least that much from Economics 101.
The real issue, I think, with the ultrawealthy, who spend millions on baubles and trifles, is that they don't have a concept of how much value the money they squander has for ordinary Joes like you and me. Understand I'm talking about the truly rich here, not your brother-in-law Roy who has a great job at Boeing.
And I acknowledge and agree with those who would say it's none of my business. It isn't. Each individual makes his own purchase decisions, and what's important to me isn't necessarily important to the next guy. Further, I don't begrudge people their wealth, nor hate them for it.
I am glad to have the debate about trickle-down versus bottom-up economics; I just wish we didn't base it on straw men like fairness and opportunity. The world isn't fair, and for the most part people who start from a better position in life are the ones who experience the most financial success.
I'm interested in effectiveness. From where I sit, $82 million for Andy Warhol's etching doesn't seem like a terribly efficient way to stimulate the economy, yet the people who are able and willing to pay such a price are the very ones upon whom the delicate balance of our nation's fiscal health rests. There's something wrong with that picture.
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