3 Things 6-15-26

 Thing One

The Free Market Is Not Perfect But It’s The Best Answer

The following is from an article in The Wall Street Journal written by Barton Swain. The text in quotations is from two professors, Benjamin and Jenna Storey, at Furman University:

"...Many critiques of liberalism and modernity quickly become critiques of the free market. It’s a tempting solution because the market is something you can change or rearrange by force of law. The Storeys don’t take that view. 'The problems we’re facing right now are not fundamentally economic problems. They’re fundamentally educational and philosophical problems. The way forward is a multigenerational project, and it’s going to begin in schools.'"

Now as for the free market, the chart below suggests that a majority of American families (58%) are participating in the stock market either directly or indirectly. Yet a closer look at the details reveals that certain demographic groups remain underrepresented. While White households are investing at a rate of 66%, Black households are participating at a rate of 39%, and Hispanic households at just 28%.

To me, this is at least one data point that supports the Storeys' argument that the problems are perhaps educational and philosophical. In other words, what we don't know—or what we know that simply isn't so—affects what we believe. And what we believe affects how we behave, perhaps to our detriment in the case of investing.

Take Elon Musk as an example. Much of the public discussion surrounding him focuses on the size of his wealth. If he eventually becomes a trillionaire, many people will view that fact alone as evidence that something is wrong with the system. I see it differently.

Elon Musk did not become wealthy by making other people poor. He became wealthy by creating products, companies, and technologies that millions of people voluntarily chose to support. Along the way, he created wealth for employees, suppliers, customers, pension funds, retirement accounts, and ordinary investors. The same Tesla stock that made Musk wealthier has also helped millions of people grow their 401(k)s, IRAs, and brokerage accounts.

More importantly, Musk's wealth is not merely a reward; it is a lesson. It demonstrates that innovation, risk-taking, long-term thinking, and solving difficult problems can create extraordinary value. Whether one likes Musk personally is beside the point. The more important question is whether we teach future generations to resent wealth creation or to understand how it occurs.

The free market is not perfect. No human system is. But it remains the most effective wealth-creation mechanism ever developed. The evidence is all around us. The challenge is not that too many people are participating in the market. The challenge is that too many people are standing on the sidelines while others are building wealth through ownership.

So, like the Storeys suggest, this is a multigenerational project. It begins with changing how we think, what we teach, and what we believe about money, investing, entrepreneurship, and ownership.

Join the multigenerational project by sharing this article—or our contact information—with someone who might benefit from it. The sooner more people understand how wealth is created, the sooner more people can participate in creating it themselves.

Thing Two  

You Are A Big Corporation Owner (At Least You Should Be)

According to Pew Research's analysis of the Federal Reserve's Survey of Consumer Finances (from the chart referenced in Thing One), 58% of American families are invested in the stock market either directly or through some kind of retirement plan (see the chart below). That's right, 58% of American families are part owners of big corporations. That includes the twenty-something-year-old who works at Walmart and has smartly decided to join his company's 401(k) plan and it also includes the 67-year-old who is collecting a pension.

The managers of those big corporations that the 58% are invested in know that providing competitive products and services is a way to build wealth for themselves and the owners of the companies. The twenty-something-year-old has somehow learned that working for and investing (becoming an owner) in big, successful corporations is a tried and true way of building wealth. And the 67-year-old pensioner, whether he knows it or not, is also a beneficiary of the success of big corporations since part of the funds used to pay him are invested in the stock market.

We should all know that you don't grow more wealthy as a society by increasing the tax rates on the producers of wealth. At best, you get a redistribution of existing societal wealth. At worst, because taxes at a certain level disincentivize investment and production, you get less societal wealth.

So what we all need to know is that big corporations are not our enemies. We need them to keep innovating. We need them to keep creating wealth. We need them to keep "getting richer" and we need them to keep creating jobs. If they do that, it will help us all continue to create more wealth for ourselves and our families.

What we ultimately need then is for the 58% of American families who are investors/owners of corporations to become 100% (via more participation in defined contribution and individual plans). The closer we get to that number, the easier it'll be to tell the difference between the good guys and bad guys - politicians and otherwise - as it pertains to wealth creation and preservation.

Tell your family and friends to ignore the noise and become owners.

Thing Three

Just A Thought  

"Never wrestle with a pig. You both get dirty and the pig likes it." - George Bernard Shaw