Joe Biden and Will Smith Speak Economic Truth

1. At the annual Davos conference, in which the wealthiest people in the world gather to discuss, you know, rich-people topics, Vice President Biden delivered a speech that plenty of the people in that room needed to hear. As Reuter’s Ben Hirschler reports:

“My call to action here is simple – embrace your obligation to workers as well as your shareholders,” Biden said, criticizing the recent trend by firms to return mountains of cash to investors by buying back stock rather than investing for the future.

Biden could not be any more right, here. If you want to learn about the roughly trillion-dollar dent that stock buybacks leave in the American economy each year, Nick Hanauer wrote about it for The Atlantic last year. Biden then dropped an even-bigger truth bomb on Davos:

“When the middle class does well, the wealthy do very well, and the poor have a ladder up,” he said.

Joe Biden to rich people, basically: "You don't have to be less rich, but  poor people do have to be less poor.

Joe Biden to rich people, basically: “You don’t have to be less rich, but poor people do have to be less poor.”

This is the absolute truth, and the fact that Biden is dropping it on the Davos crowd, which has thrived on the trickle down concept that giving rich people more money will benefit everyone, is admirable. The fact is, tax cuts for the wealthy don’t create wealth, in part because rich people are rich because they’re very, very good at holding onto the money they make. You need the middle class to get a raise, because they will then spend that money on goods and services, thereby stimulating the economy and creating more good-paying jobs, which will continue the cycle in a positive feedback loop. And, yes, plenty of that money will flow upwards to the top one percent, meaning that we’re not asking the very rich to give up their Davos membership cards. The thing about economic inclusion is that it benefits everyone and not just the very rich.

2. When asked today on Good Morning America about his decision to boycott the Oscars because every single major nominee was white, Will Smith correctly identified diversity as “the American superpower.”

Smith and Biden seem to be working from the same inclusionary guidebook this week. Here’s Nick Hanauer on diversity:

The evidence is clear: diversity does not hinder growth—it supercharges it. That has always been America’s competitive advantage: we have the most diverse workforce in the world, and for all our problems, we do a better job of integrating diversity than anyone else. Diversity is America’s most valuable resource; it is what makes us the most innovative nation on Earth.

Let’s be clear: diversity is the morally right thing to do, but it makes economic sense, too. One of the most diverse action movie franchises of all time, the Fast and Furious series, also features the most diverse cast in Hollywood. If you think that’s a coincidence, you’re not thinking seriously about this. People like to see themselves in the movies they watch. As Smith says, his Oscar boycott “is about children that are going to sit down and they’re going to watch [the Oscars] and they’re not going to see themselves represented.” Those kids won’t be included, and they will feel as though Hollywood has excluded them. Without new, diverse generations of actors and directors and screenwriters, Hollywood will continue to make movies by and for an increasingly white population, and eventually the whole system will become irrelevant. In economics and in art, inclusion is key.

3. Joe Biden is about to have a lot of time on his hands; I’d love to see he and Will Smith team up to make an inclusive economics-themed buddy cop movie. But maybe that’s just me.

Paul Constant

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