Cavalcade of Mammals

Notes on Aug 11, 2025 epsode, “Overspending, Broken Families, Bad Policies: 6 Steps To Rebuild The American Dream”.

In this episode, Tom Bilyeu presents the arguments of Thomas Sowell’s 2015 book Wealth, Poverty, and Politics, adapted to fit the Impact Theory themes. Sowell began as an economist, and has had a second career as a conservative public intellectual, a black man who tells conservatives that he too agrees that the government should do nothing about racism.

Tom Bilyeu starts by calling “inequality” the most pervasive thing in human history, more common than poverty. While nearly everyone was poor before, say, 1750, inequality differs greatly between societies and rises and falls separately from median income. His examples of this in the animal kingdom are laughable.

This all serves as an introduction the question of why some societies got rich post-1750 and others lagged, one of the subjects of the field of economics. And one of the interesting questions is, why did the industrial revolution start in England, and in the 1700s, and not in another country, and why in the 1700s and not in the 700s or 30,000 years ago? Another question is of development and economic growth. Why have some countries, like Korea, caught up to Europe/America, while others have lagged?

Interesting questions, but TB presents a potted ahistorical account. TB starts with a capsule history of Uganda, poor due to ‘bad choices’, which ignores pretty much the entire history of Uganda (colony of England until 1962, then war and dictatorship for most of the next 60 years). His other historical examples are strange and he doesn’t have any insight.

TB’s main subject is individual success and inequality within a society. His discussion of what makes a society wealthy (high potential GDP, high growth of GDP) is a different topic.

He highlights something he calls the “Merit Myth”, “The merit myth is the “the mistaken belief that differences in outcomes, test scores, careers, wealth must result from either innate superiority, exploitation, or deliberate discrimination.” It is an curious black and white framing. While no one argues that success *must* be due to innate superiority and the unsuccessful are both inferior and held down by discrimination, it is quite a jump to say that these things aren’t factors, especially in a country with the US’s history. After hedging a bit, TB concludes that government action can’t affect these success factors, that is all due family and culture. Government policies that try inevitably lead to disaster and mass death. I wonder if he ever cracked a US history book? TB isn’t a hard core racist, but he thinks the primary problem blacks in the US have is a culture of failure, here echoing Sowell’s argument.

TB strangely comments that the US has been suffering under ‘racial quotas’ for the last decade. This is news to me. His statistics about poverty among blacks in the US seem hopelessly muddled by ignoring the rising wealth (GDP) of the US (doubling 1940-1960). Black family poverty dropped 32% 1940-1960 (to 48%), but white family poverty dropped 61% (to 12%) [Race and Poverty: A Forty-Year Record, James P. Smith and Finis Welch. 1987].

This argument is introduced to attack Lyndon Johnson’s Great Society programs. This included Medicare, Medicaid, Food Stamps, the right to vote, and desegregation of schools, public spaces, and workplaces. The spending in the Great Society programs wasn’t focused on black Americans, and most of the spending has gone to white Americans.

Let me provide a bit of background. Conservatives at the time supported racist segregation policies–both government and private, and had been refusing to follow the law on school desegregation since the 1954 US Supreme Court ruling. Because of racism, schools attended by black children were decrepit and didn’t have the books and other resources needed. A Great Society program put some money into this and partially alleviated it. Of course, Americans views didn’t change when these Great Society programs were enacted–racists still worked to maintain white supremacy and opposed any government program that helped African Americans or reduced barriers to equality. Conservatives had a lot of failures–legal segregation ended, and the cultural norms excluding African Americans from good jobs slowly eroded. However, they did have successes–housing in the US remains segregated, and schools are as racially segregated as they were in 1965, though today indirectly through housing and zoning law. And conservatives have eroded and reduced many of these anti-poverty programs. Still, these programs (and the growing US economy) have been substantially reduced poverty, especially extreme poverty in the US.

Conservative have worked to destroy Great Society programs to this day, and their attacks on the Great Society programs focus on blacks and other minorities. Conservatives find this line of argument the best attack, the one that white Americans respond to best. After these programs passed, conservatives moved from direct support for racist policy to attacking the laws supporting equality for mentioning race and ethnicity, which they called reverse racism. Conservatives have also worked to limit and condition welfare payments, installing income caps, work requirements, and lifetime benefit caps. Sowell’s writing is a second line of attack, arguing these policies are bad for African Americans.

It’s unclear to what extend welfare rules affected marriage rates–society was undergoing a cultural upheaval, and marriage rates went down and divorce rates went up across US society. Studies looking at whether welfare affected marriage rates among poor women have had mixed results, and the effect size is fairly small in any case. Still, Tom Bilyeu will be glad to hear that conservative changes to welfare programs in the 1990s removed many of the disincentives for marriage (that two incomes push a family over the cutoff), mainly by cutting single mothers off from these programs. The largest remaining welfare program is Medicaid (health care), SNAP (food), with EITC (tax rebate for poor workers) third.

Tom Bilyeu’s podcast often focuses on maximizing human potential. Providing health care for kids keeps them healthy and maximizes their potential. Providing affordable health care for families helps maximize human potential–people dying early, suffering untreated medical conditions, or taking on medical debt reduces their ability to perform at high level. Kid don’t develop or learn well if they can’t get enough to eat. Access to a good education benefits not just the individual but also the society by increasing the productive capacity of its workers. And yet Bilyeu here repeats Sowell’s attacks on these programs.

TB will be happy to know that while inequality in the US is high and heading up, the US is still the richest large country, with the highest median income, and the highest rate of economic growth among large, high income countries (OECD). Funny enough, his visual for the threat of political violence is peaceful protest.

TB warns of dangerous populist policies–taxing the rich, student debt relief, and welfare for the poor. After 70 years of reducing taxes on the rich, there is plenty of room to raise them and cut into tax avoidance. Student debt relief would help the middle class by reversing decades of under investment in education, and trigger investment and entrepreneurial activity. No populist today is proposing new welfare programs–in fact, the current populist has cut health care programs. Strangely, TB skips a mention of the populist policy being implemented today that is already having negative economic consequences which will prove disastrous if fully implemented–an plan to kick out millions of immigrants.

TB’s prescriptions (and my notes):

1. End the disincentives to family formation.
2. Tie welfare to skill building.
This was done 20 years ago, thanks for catching up TB!

3. Break the government school monopoly.
The US of course has no such thing. Private schools are a thing. Parents can even homeschool. What TB means is have the government subsidize private schools. Which many / most cities are already doing to some extent. As best as people can tell, it hasn’t improved education, but it is a juicy pot of money that private school companies want to tap.

4. Roll back restrictive occupational licensing for low-risk industries. Streamline zoning and business incorporation regulations.
Not clear what he is getting at–there is support in both political parties to remove some occupational licenses, mostly a local issue. Starting a business is easier in the US than in most of the world already. Perhaps the standard conservative plan to end regulations for clean air, clean water, safe food, and worker safety?

5. Stop deficit spending ASAP.
Waiting on TB’s presentation of a balanced Federal budget! Paired with his proposals to cut the already low taxes on the hundred millionaires, I think what he’s proposing here is a huge cut in Social Security payments and Medicare. This has been the conservative Holy Grail since 1935. With the large baby boomer generation hitting the age for SS and Medicare, to keep these programs funded in coming years the US will either need to raise taxes or cut people off. It would immiserate US citizens and wreak the US economy. Hard pass.

6. Encourage asset ownership. Like any good salesman, TB ends with core business, investment advice to the upper middle class.

Resources mentioned
Thomas Sowell’s Wealth, Poverty, and Politics (2015). Sowell’s extended argument against US government programs to help African Americans, against affirmative action and welfare for the poor. A political book more than an economics book.

Tom Bilyeu is a podcaster (Impact Theory). Made a fortune selling health bars, took up podcasting. He started out mainly interviewing authors and other influencers, focusing on pop business advice/entrepreneurship, self-actualization/success, and health/wellness. He interviews indiscriminately, both knowledgeable people about their area of expertise and cranks and health quacks. And trendy idea authors, which describes a lot of the business authors. In the last two years, he started talking about economics–inflation and government debt, inequality and taxes.

His podcast is pitched to people in top 20% – 5% of income. He tells them that government debt is causing inflation and this leads to rich to getting richer and the poor poorer. The solution is investment. He gives his upper-middle class listeners the idea that their interests are the same as the the interests as the billionaires and hundred-millionaires. Increased taxes won’t help, and it will make things worse. Cutting government regulation of all types is key to increasing investment and returns on investment. So basically business conservatism, with a dose of ‘debt will destroy the US’.

Tom Bilyeu is an intellectual light weight. Familiar with conventional wisdom, and practiced at spouting it. He plucks ideas from his guests, pop science, the Zeitgeist, and throws them in as analogies, examples, whether they fit or not, not really understanding them. He comes off as a dumb guy’s idea of smart, well-informed guy.

His recent big idea is that inflation causes inequality and people need to invest to build wealth. He mostly avoids connecting this to political parties, but is always pushing conservative ideas and avoids criticism of Republican actions and policy.

For example, current US federal debt is $36 trillion, and the recent Republican budget will increase it by an additional $4 trillion (over the pre-existing projected increase). But a scan of episodes when the budget was being passed doesn’t see it showing up as a topic. The first rule of holes is when you are in a hole stop digging, so this is an easy one.

Tom Bilyeu has a poor grasp of economics, but strong opinions. Thinks the flat tax is good idea. Says taxing wealth is basically impossible, impractical, and would have the effect of severely cutting investment.

Bilyeu bolsters his economic arguments with historical examples, China under Mao, Cambodia under the Khmer Rouge, the French Revolution of 1789-99. He doesn’t seem to know much American history, he’s never asked himself, how did the US go from high income and wealth inequality in the 1880s-1890s to a much lower level in 1960s-1970s?

July 28 episode
I listened to the July 28 episode, “The Death of the Middle Class: Tax the Rich or Fix the System” (titled “What You’ve Been Told About Taxes Is a Lie — Here’s Who Really Pays” on Youtube). It was very dishonest. Bilyeu uses real figures, but not the appropriate stats for the topic. Bilyeu tees up his argument by describing taxes paid by the rich and the poor, and for ‘taxes’ talks only about federal income taxes. Not all taxes (local + federal), not even all federal taxes–leaving out the 16.4% Social Security and 1.65% Medicare taxes, totaling 18% paid by all low/middle income workers. So he argues that most ‘taxes’ are paid by the rich, way in excess to their share of total income in the country. Total tax burden in the US is nearly flat–20% for the poorest quintile to 33% for the top 1%. And the rich have innovated tax avoidance–they get gains directly as wealth without it even showing up as income–they minimize income. Even estate taxes are bypassed. It is true that the rich pay much more in federal income tax than the poorer half of Americans. And this is because the poorer half don’t have much, and spend nearly all their income on food, shelter, medical care, and other essentials. You can’t get money from a stone. Also, the rich have been taking a larger percent of the total gains in the economy every year, raking in a bigger chunk of the total US income each year, so pay a larger portion of income taxes every year. The highest US tax burden is on the upper middle class and lower upper class, people making $250k-$1M, especially those whose income is reported to the feds as W-2 or 1099 income.

Inequality in the US is high and has increased in the last few decades. What can be done, according to Bilyeu? Taxes on the rich can’t be raised, that is unpossible, like dividing by zero. And even if it was done, it wouldn’t be fair (the rich pay way more than their fair share in taxes today). And it would decrease investment and therefore the growth of the economy so everyone would just be poorer, and the rich would just leave the country. Also, in support of his argument, he cites the crank economics Laffer curve. A bunch of nonsense arguments.

He also makes the creative argument that wealth is unknowable, unmeasurable, that taxing wealth would mean taxing unrealized gains, which are ineffable and they don’t exist until assets are sold and income is recorded. This is a surprise to banks, which routinely appraise these assets as collateral for loans. Liquid assets–traded stocks, bonds, etc. of course have a market price.

Bilyeu points to inflation (government printing money!) as eroding the wealth of the poor and increasing the price assets held by the rich. This isn’t right–the poor don’t have assets and the main asset of the middle class is the family home. And wages have kept up with inflation as the US went through the pandemic and post-pandemic inflation. Interestingly, the poorest workers have done better than middle income workers.

Bilyeu goes on to make laughable arguments about how the rich will leave if taxes go up. The rich using tax havens to avoid taxes (and legal/political difficulties) is a huge problem. Of course, the US is one of the those tax havens where looters stash their money, London is another one. Lots of unoccupied apartments in London’s Shard are owned by rich foreigners (Russians, Middle Easterners, other kleptocrats) looking to avoid taxes / seizure during corruption trials or revolution. The rich leaving is a political problem. Does the US let them renounce US citizenship, take their money, and still visit and invest in US companies? This is a political choice for US voters to make. But most of the rich won’t leave the US, most won’t even leave the state they are established in for a state with lower taxes.

One last dishonest bit of Bilyeu–he says that the US government pulled in less in federal tax during the 1950s when the top rate was 90% than it does today, to prove his poiint that a high tax rate on the wealthy can’t bring in income. Of course, the US is about four times richer today and has an economy nine times as big with double the population, so not a good comparison!

Tariffs
In another recent episode, He says Trump’s high tariff policy, and chaos tariff policy, will ‘bring manufacturing back to the US’. Trump’s tariff policies have have had little effect on US manufacturing, and are not expected to have a big impact. The primary effects on the US are increased inflation, lower exports leading to higher unemployment and lower GDP growth. The 2026 Republican budget cut and canceled a big chunk of the 2021 Infrastructure Investment and Jobs Act, which did raise manufacturing investment in the US.

The effects of tariffs is well understood, conventional economics. A sustained and well implemented policy of higher US tariffs would decrease imports and increase manufacturing in the US. This would be offset by decreased exports. Overall, US economic growth would slow, and slow relative to other developed countries with lower tariffs and higher trade.

Other notes
Bilyeu says ‘everyone’ can buy into the stock market and gain along with businesses. In fact, 2/3 of households in the US don’t have substantial investments (have < $26k). The majority of US workers don’t have excess money to invest.

He thinks AI is the next big thing, and is the solution to most knowledge and business problems. Bilyeu thinks Elon Musk’s predicts about Artificial General Intelligence (human-like AI) are worth considering. Musk has been saying self-driving Teslas are right around the corner for the last decade (link). No informed person thinks the current type of AI will develop into human-like AI. It’s like predicting a tadpole will turn into a flashlight.

Republican tariffs now projected to cost US households an average of $2,400 / year. Also, it will increase unemployment. “Consumers face an overall average effective tariff rate of 18.3%, the highest since 1934.”

Dust-Licking Pimps. Mark Twain and Quincy and Immigration by Jess Piper

No Californian gentleman or lady ever abuses or opposes a [Chinese person], under any circumstances, an explanation that seems to be much needed in the East. Only the scum of the population do it – they and their children; they, and, naturally and consistently the policeman and politicians likewise, for these are the dust-licking pimps and slaves of the scum…

“Roughing It”, Mark Twain

Indy Toxic Heritage: Pollution, Place, and Power

“NFL” Shooting Wasn’t Random. Another manifesto gets censored in a case that needs transparency. by Ken Klippenstein

Political books that look interesting:
Jesus and John Wayne: How White Evangelicals Corrupted a Faith and Fractured a Nation by Kristin Kobes Du Mez
Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism by Ha-Joon Chang
The Divide: A Brief Guide to Global Inequality and its Solutions by Jason Hickel
How to Hide an Empire: A History of the Greater United States by Daniel Immerwahr
The Deficit Myth: Modern Monetary Theory and the Birth of the People’s Economy by Stephanie Kelton
The Triumph of Injustice: How the Rich Dodge Taxes and How to Make Them Pay by Emmanuel Saez, Gabriel Zucman
Goliath: The 100-Year War Between Monopoly Power and Democracy by Matt Stoller
Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right by Jane Mayer
The Color of Law: A Forgotten History of How Our Government Segregated America by Richard Rothstein

Anton Schmid. “He was one of only three Wehrmacht soldiers who were executed for helping Jews.“