No Good Billionaires–Myth 1: Charity Is Better Than Government Handouts
Isn't it refreshing to see a story about someone giving back?
Not every wealthy person is Ebenezer Scrooge, clutching every penny for himself. Some of the wealthiest people on Earth also realize how fortunate they are to have been so blessed, so they share the wealth. When they open their pocketbooks, they aren't stingy.
Just look at Jeff Bezos, who recently announced he was donating $100 million to food banks to help America get through the coronavirus. Wow! That's so much money, and he's just giving it away! It's way more than you or I or several families put together are likely to earn in our entire lifetimes! It's more money than you could fit in your fridge in stacks of $100 bills—unless you're Nancy Pelosi.
If you had that much money in a bank account with just 1% interest compounding annually, you and me and those several families could easily live off that interest without ever touching the principal! Forever! Come to think of it, it's kind of more money than any one person could ever need or even spend on anything reasonable.
Sure, if you want your own private jet to shuttle you around the world eating dinner off the naked bodies of a series of celebrities, you could spend that much pretty easily, but if you just want to have a good, satisfying life, $100 million in the banks isn't much better than an $80,000 salary—depending on factors like your debt burden and the cost of living where you live.
So why don't any one of these mega-billionaires like Mark Zuckerberg, Bill Gates, Elon Musk, and Michael Bloomberg—if they really are as generous as they seem—just give away their riches and secure a place in history as the person who personally ended world hunger or homelessness in America? They could even keep a few hundred million to continue living like kings (or at least like Warren Buffett).
Surely it must not be that simple? Because if this was just a matter of private greed preventing that kind of transformational change, governments would surely have used their ability to levy taxes for the public good to seize that fallow wealth and make the world a better place. There has to be some reasonable explanation for why they don't just give it all away. Surely...
In this series we'll look at myths around philanthropy, including the notions that it's possible for billionaires to be generous, that their "wealth" is substantially different than money, that their private foundations do a lot of good, and that they are patrons of the arts.
But to start things off, let's look at one of the simplest explanations for this disconnect.
Myth: Charity Is Actually Better Than Taxation
What you'll hear
Government intervention is a blunt instrument, and charity is a scalpel.
The government is okay at helping people, but charity is really the way to go. Private individuals aren't hampered by government bureaucracy and can respond more efficiently and directly to needs as they occur. Over time we should try to shift toward a more voluntary charity-based model of social assistance, rather than relying on big government.
Why It's wrong
Actually the opposite is true.
During economic downturns, when the need is greatest, government assistance like unemployment, food stamps, and welfare kick in automatically to help those in need. They're called automatic stabilizers, and they help to mitigate the impact of these crises and make it easier to shift toward recovery.
Automatic stabilizers | National income and price determination | AP Macroeconomics | Khan Academywww.youtube.com
Meanwhile the wealthy are often anxiously tending to their own floundering finances or businesses amid the tumult and aren't as likely to open their checkbooks for charity. What this means is that charitable giving actually declines when people need it the most.
On top of that, as bad as politicians often are at being responsive to the needs of their constituents, at least they have constituents. By contrast, there's nothing to stop the wealthy from holing up in their gated compounds, beholden to no one and only responsive to the needs of the rarefied elites they know—donating to foundations developing a cure for gout or gene therapy to treat Habsburg Jaw.
To the extent that they are aware of the plight of others, it's often connected to their religious affiliation, which is why religious charities—that often spend money on churches and missionary work and who proselytize to the needy—are among the largest charities in the US.
If you don't mind someone else's idea of God determining which causes are important and who gets helped, then charity is a great way to go. For the rest of us, higher taxes on the wealthy—and reducing the amount they can dodge those taxes through, say "charity"—would be better.
In this sense, a blunt instrument is often exactly what we need—just a flood of money going to everyone who might realistically need it. And while government bureaucracy is annoying and should be cut where possible—particular when it comes to overzealous means testing—the fact that the federal government deals with such massive sums of money actually makes it possible to consolidate administrative overhead.
All this means that the government can actually use its resources for the public good far more efficiently than a bunch of disparate charitable foundations. In other words: Taxation and government handouts are (generally) much better than charity.
Charity: how effective is giving? | The Economistwww.youtube.com
While charitable donations have the added value of making rich people feel good and earning them some good PR, they aren't actually better for the world—or even nearly as good—as a robust social safety net. That means we should really limit the amount of taxes that can be written off through charitable donations.
Of course, without that tax incentive a lot of charities might receive substantially less in donations from the ultra-wealthy. But in that case we would have to ask: Are Billionaires really that generous? Check out our next installment to find out.
- Charities You Can Donate to During COVID-19 - Liberty Project ›
- The Most Overlooked Tax Deductions - PayPath ›
- No Good Billionaires—Myth 2: But They're So Generous! - PayPath ›
- How Much Money Do US Politicians Make? - PayPath ›
Looking for a job? In addition to encountering those annoying never-ending job interviews you may find yourself face-to-face with an artificial intelligence bot.
Companies worldwide increasingly use artificial intelligence tools and analytics in employment decision-making – from parsing through resumes and screening candidates to automated assessments and digital interviews. But recent studies claim that AI does more harm than good.
While AI screening tools were developed to save companies time and money, they’ve been criticized for placing women and people of color at a disadvantage. The problem is that many companies lack appreciable diversity in their data set, making it impossible for an algorithm to know how people from underrepresented groups have performed in the past. As a result, the algorithm will be biased toward the data available and compare future candidates to that archetype.
The City’s Automated Employment Decision Tools (AEDT) law is designed to offset the potential misuse of AI and protect job candidates against discrimination. It was enforced on July 5th, 2023 in New York City - with other cities and states expected to gradually follow suit. Employers must now inform applicants when and how they encounter AI. Furthermore, companies have to commission a third-party audit of the AI software used, and publish a summary of the results to prove that their systems aren’t racist or sexist. Job applicants are able to request information regarding what data is collected and analyzed by the AI. Violations of the law can result in fines of up to $1,500.
Replacing Human Hiring Decisions
However, should a job applicant want to opt-out of such impersonal judgement by a bot, the new law's scope is quite limited.
While the law specifies that instructions for requesting an alternative selection process must be included in the AI screening disclosure, companies aren't actually required to use other screening methods. Not to mention that the law only applies to AI in hiring and not any other employment decisions. It also wouldn't apply if the AI, for example, flags candidates with relevant experience, but a human then reviews all applications, making the ultimate hiring decision.
Some civil rights advocates and public interest groups argue that the law isn’t extensive enough and that it’s even unenforceable. On the other hand, businesses say that it’s impractical, costly, and burdensome, and that independent audits aren’t feasible.
Responsible use of AI in hiring
Although this law may be a good first attempt to assign more regulatory guardrails around AI, it remains to be seen if it ensures the responsible use of AI in hiring processes. At the end of the day, perhaps recruiting talent should remain a human-made decision.
The good news is that AI can help companies without harming potential job candidates in many ways – such as connecting new employees with internal organizational information and company benefits during onboarding. Or helping employees to do their jobs more effectively rather than replacing them.
There’s all this talk about solo travel. And for good reason — no wasting precious time waiting for others to get their act together, take the plans out of the group chat and actually buy the tickets. Going solo, you can be spontaneous. You can plan your trips according to your precise tastes. You can hop on any flight and fly awayyyyyy.
But what if each time you flew you’d get a free ticket? That’s what you get with the Southwest Companion Pass.
Award status, upgrades, lounge access — there are many perks in the frequent flier game. But one of the coveted holy grails is the Southwest Companion Pass.
What is the Southwest Companion Pass?
The Companion Pass is part of Southwest’s Rapid Rewards program. You get to choose one person to be your “companion,” and they fly with you for free (plus some taxes and fees) on every flight. That’s right. Two for the price of one. That’s half off each ticket if you split it! Whether you’re flying with a partner, family member, friend, or anyone else, they can tag along for free.
And it gets better: once you earn the pass, you can reap the rewards for that full calendar year … AND the next. That’s why people go mad trying to earn a companion pass during the early months of the year. The sooner you qualify, the longer you can use it.
There are also no blackout dates. There are no limits. And if you didn’t purchase the ticket (think: work travel, your companion, or a generous benefactor), there are no restrictions! As long as you’re the one on the plane, your companion can also … be on the plane.
You can also switch out your designated companion 3x a year. So, no need to stay in a relationship simply to get the most out of your companion pass! Ghost and fly away — with a whole new companion!
If this sounds too good to be true — it’s not. But there is one small catch. It’s kinda tough to earn this mega reward.
How to qualify for the Southwest Companion Pass?
You can qualify for the pass in one of two ways:
- Fly 100 qualifying one-way flights
- Earn 135,000 qualifying points in a calendar year.
Clearly, this is no small feat — especially if you’re trying to qualify ASAP.
So how do you actually earn the Southwest Companion Pass?
Don’t worry, there’s a path to earning this amazing reward without climbing on 100 flights or spending an exorbitant amount of money.
Earning 135K reward points may seem completely impossible, but it’s easier than it sounds. Simply sign up for a Southwest Credit Card and turn those spending habits into a rapid rewards account. Through the Rewards Priority Credit Card, earn points when using local transit and commuting, plus score major points and miles whenever you spend.
Stay with me here. This is not some scheme to get you into credit card debt. Many airline cards come with potential savings, giantic rewards, awarding you points, and cashback with every purchase you make that can be redeemed for travel. And often they can come with passive sign-up bonuses. If you spend a specific amount of money within a certain timeframe of opening the card, you can be in for a windfall of points.
Now that’s where the companion pass comes in:
- Southwest Rapid Rewards Premier
- Southwest Rapid Rewards Plus Credit Card
- Southwest Priority Credit Card
- Southwest Rapid Rewards Premier Business Credit Card
- Southwest Performance Business Credit Card
Southwest has three personal cards and a business card. Each of these cards offers rewards between 30K-80K points. In the past, people could open two cards and get a bonus that granted enough points to almost meet the minimum. However, with new restrictions on personal cards, you can only get one bonus every 24 months. Boo!
However, this doesn’t apply to business cards. If you’re eligible, have good credit, and not likely to spiral into insane credit card debt, you can open a business card and a personal card, and accrue 100K+ points. The Rapid Rewards Priority Credit Card will get you points after you spend money in no time.
Now to earn the rest of them.
The secret to gaining these credit card points is to plan your card sign-ups around big purchases. Just before a recent move, I opened a card . . . and the rewards came rolling in — a small balm to ease the pain of how exorbitant moving can be.
Put everyday spend — especially big purchases or bulk items — on your Southwest credit card and watch your award points quickly add up. Typically, you earn 1 point per $1 spent on your Southwest card and 2 points per $1 on actual Southwest purchases.
But there are other ways to earn points, including:
- Flying Southwest: Booking travel on Southwest earns more points. The cost of this travel will be worth it with your companion pass
- Shopping from Rapid Rewards Partners: Purchases with Southwest’s “Home & Lifestyle” and “Shop and Dine” Partners also earn Companion Pass qualifying points. While you shouldn’t make gratuitous purchases, browse Southwest’s partners to see if you could earn extra points for items you'd be purchasing anyway. All this, simply from enrolling in their Dining Program and shopping with their partners.
So there you have it! And since it’s almost Spring, get to earning and soon you’ll be flying two for the price of one!