Why The Middle Class Is Disappearing - What's The Fix?

What do you have to do if you want a thriving middle class? You must abolish the Fed, get rid of printing money, period, end of story. Otherwise, the middle class is merely a point on the six-phase cycle of debt. And if you're perfectly happy with that lasting for 50 years and then it goes away, okay, then keep doing what we're doing because that's how it works now. This is so easy to map out. These cycles are repeating. You'll have a stretch of middle class and then it goes away because of the nature of inflation. So, you have to get rid of the Fed. You have to kill inflation. That will with precious few other changes allow you to build a thriving middle class. Just basically stop stealing their money. The reason that the rich get richer and the poor get poorer is that when you print money, you socialize losses across everybody and you only give to asset holders. And you disproportionately give to connected asset holders. So, the system really does make the rich richer and the poor poorer. They're not misidentifying that. That is true. But when you go protest on Wall Street, you're in the wrong place. You're just mad at people who go, "What Why are you mad at me? This is the game and I'm just playing it well." So, now you're pissed because you don't like the no roughing the passer rule in football? Like, what the [ __ ] It is a rule. And so, I'm going to play the game knowing that's the rule. Stop being mad. So, I get if you're mad about deflated balls and that kind of stuff does happen. But like, bro, get mad at the right people, please. And the right people are the the structure of the banking system and the political system is such that they rob from everybody and only give to people that hold assets. It is that simple. And people want to shock and jive and hide from that reality. It's that simple. If you don't do that, you will always have a temporary middle class that is born of catastrophe because we have to go through bloodshed to reset all of this. It's born of catastrophe, you get 50 years of it and then we're right back to where we are now. And it doesn't have to be this way. Let's start at the policy level cuz I think socialism versus capitalism, it's an emotional discussion and I want to kind of ground this in something a bit more tangible. I love that about you, Drew. So, you know, I try to bring it back. I want you to be the sung hero. Don't be the unsung hero of this duo. You're amazing. So, I have to start singing? No, we're going to sing for you. Let's go. We're Here I'll I'll here all week, guys. Nice. Let's start with tax the rich, right? Somebody just said, "Tom, of course Tom can say this. He gets the biggest tax cut." Let's I know. I know. I know. But peop- socialism, let's start at the very beginning. So, instead of socialism, instead of capitalism, let's start at the very beginning. I'm starting at the origin, okay? Do people understand that to get a tax break I have to have created something of such value that it generates a profit? Or that I have to have invested so wisely that I'm making a profit? Guys, I still have to make the [ __ ] profit. So, uh where were you guys at 2:00 a.m. on a Friday night when everybody else is at the [ __ ] club and I was under the machine with bloody knuckles? Where were you when there was almost a war between the Bloods and the Crips on the production line and I had to make sure that that [ __ ] doesn't pop off? Where were you when I had to drive somebody to the most dangerous neighborhood in America? Uh I was all alone, Drew. So, I still should take half of your money, though, Tom. Like Listen. Stop being selfish. Stop being Yeah. Yeah. You lo- you lose the election, you lose the the battle. Mom Donny runs for president, he gets this approved. We're taxing the rich now. The rich uh the effective tax rate is now 60%, 70% on the highest income earners. Give me the day one, day two, day three, year one, year two of what actually happens when some of these policies actually get enacted. Cuz they sound good on the headline level, people want it. If we just tax the rich, everything will be fine. But what actually happens when the those tax rates are incompatible with what society has deemed to be appropriate. What happens when you tax the rich? Tax the rich, they leave. Over tomorrow, you get 80%. They leave. They leave the country. They leave the country. wherever they have to leave. They leave the country, okay. Tax revenues drop. Yep. So, what's the second-order consequence of the money that we were taking now leaving? They start printing money. Technically, when enough rich people leave, they do capital controls. And so, they literally stop you from leaving the country. So, like, you can move out, but your money can't leave, or there's You may not even be able to leave. But yes, sure, you go, but we keep your money. Copy. So, they just confiscated that person's wealth. And remember, let's think of Cyprus, because everybody thinks they're going to create a system that just takes money from the billionaires, and they they really can't see that's not how it plays out. You can tax the billionaires to 100%. You just take everything. I need people to hear this. Mhm. You can take everything from the billionaires. It doesn't make a dent in a $36 trillion and climbing deficit. Okay, so you know that's not going to work. If we know that we can tax them at 100% and it's not going to work, then guess who else gets taxed? They get taxed. And guess how they try to make up the shortfall. They print money. Printing money is a tax. So, you end up just taxing everybody to death. And then, for the Cyprus example So, in Cyprus, because they got themselves in over their skis from a debt perspective, they had to con- they had to confiscate wealth. So, it was like 46.7% of every dollar over 100,000 in somebody's bank account was taken overnight. No warning, just taken. Uh imagine that you saved up 30 years to have that money, and they took half of it. That was going to be the money that you put your kids through college, or that you retired with, or whatever. They just took it. Brutus said, "Drew, please chat GPT why Tom's argument is disingenuous. Uh it played out in France and in Norway. Um Norway implemented What played out? The uh they increased the tax on the rich, and those people flee. Like, the money left. Brutus, my beloved, who is You I really think you act in good faith. So, it stings that you think I'm being disingenuous. We disagree, fair enough. Remember, and we were just talking about this, to understand the way that I think you have to see that innovation to me is the thing. There is a reason that America is far more far more prosperous than France. And the reason that we are far more prosperous than France is because we innovate. We create the environments in which people can innovate. Uh okay, so Pookie just said bringing wages up isn't going to do anything, isn't the root of the problem. I disagree, Pookie, cuz Johnny Harris did a deep dive on the '50s to '70s, the '90s, and the '20 uh 2025s. That sounds terrible. And how what happened to the economy, what happened to the income inequality, and things like that. One thing that is for sure, after the '70s, wages stopped keeping up with inflation, where profits kind of just became distorted. So, I wanted to ask you this time, where do wages come from, and and how are wages set? Okay, so ultimately, they are set by whether or not you as a worker bring enough value that you can create fear of loss in the person that you work for. Everybody is paid in direct proportion to the difficulty of the problems they solve. That's a direct quote from Elon Musk, and I think that that is exceedingly true. If you want to make more money, you need to become more valuable. A company is going to pay you as little as they can get away with paying you, period. That that is their job. They are trying to stay in business. They are trying to make sure that they turn a profit. If they're a public company, they're trying to they have a fiduciary legal responsibility to maximize the value for shareholders. Mhm. They're going to try to get you as cheaply as possible. It is not their job to go, "How much can I afford to pay you?" It is their job to act in the best interest, long-term interest of the company, which means the company retains as much profit as humanly possible, and ability to raise, which is one of the reasons that people will pay back shareholders, is it keeps the share value high. If you want to make more money, that's what you need to do. This all gets complicated in terms of wages not keeping up with inflation because of money printing, and the setup of the actual financial system. Everyone is living in an era where you are forced to gamble in the stock market to keep up with inflation. As soon as people go, "Well, wait a second. I know what I can do. I can group up with other people. I as an individual, I'm just too small in the organization. I'm never going to be able to get what I'm worth. They can replace me too easily. But, if all of us group up and we go in and we fight as a union, then we're able to get paid." And unions cause massive stagnation because now they can negotiate so powerfully that you go, you don't lose a couple of employees, you lose all of your employees or you have a strike and now your company isn't able to move forward. And I'm sure the workers think this is brilliant, but the problem is that you grind that company, you slow that company down. Many companies can sort of drag it, but it becomes like barnacles. The unions just try to extract as much money for as little work as possible. And so, now you get into this really combative relationship between the workers and the people that own the company. Where I think we want to get to is you want corporations to use incentives like equity incentives or profit sharing incentives with the employees as a way to attract the best talent. Don't believe me, look at what Mark Zuckerberg is doing to get people to move from Open AI to what he's doing at Meta from an AI perspective. He's paying a hundred million dollar signing bonus. Signing bonus. Solve better problems. That's the real answer. Don't have a system that steals from everybody and only advantages the wealthy. And then don't think that the solution is somebody fighting on your behalf. You need to get so good you can fight on your own behalf that you actually are valuable to the company. Because in an age of AI, when you've got a bunch of people that create problems, guess who you replace with AI? The people that are creating the [ __ ] problems. Like people have no sense of self-preservation in this moment and it seems crazy. A few people are talking about raising the minimum wage and one person in particular said the hourly wage at McDonald's is $20, but then a meal for two at McDonald's is $40. And so now the wages can't even cover the cheapest food. What are your thoughts on raising minimum wage?" Debt and inflation is the problem. The issue that you're facing is it's real, it's there. Wages aren't keeping up. People are having a hard time making ends meet. But here's why changing the minimum wage does nothing. We've been changing the minimum wage forever. And what ends up happening is you're giving the companies the incentive to replace those workers because you're making them so expensive. Either with uh people with more experience that are then only able to get an entry-level job, or you're creating a situation where now with AI you're just trying to outsource as much of that to AI as humanly possible. There's always going to be these competing interests. And this is why I'm not a zero uh government guy. Somebody earlier said something about antitrust, and that's where I'm like, "Yeah, yeah, yeah. You don't Just like you don't want the unions to get to robust because they end up creating problems for the company. The company will end up creating problems for the consumer because they'll take over the whole marketplace. So internet, like I pray to sweet baby Jesus every single day that Starlink gets the bandwidth that we need here at Impact Theory because oh my god, I hate AT&T and Spectrum so much because their customer service is a joke. A joke. Yeah, you want competition. Competition is good. I'm glad that as a entrepreneur I've had to compete with people. It keeps you sharp. There there is something to that though of like if we track how wages were initially proposed, and this is me putting my Adam Smith on and like the Wealth of Nations, like the basis of economy. It was supposed to be wages are paid on a fraction of productivity. Our productivity is increasing. Company profit margins are increasing. Wages aren't keeping up. So I understand inflation, money printing. I understand assets. I understand Jekyll Island. I I the Fed is a bad guy, and I want to kill all the bankers. I get that. But, just looking at them, true. Just looking at that formula, though, like wages should be a function of productivity, and they should be a function of the company's profit. And there are some companies that are taking advantage of that. There are some companies that are having record profits that could they they can physically pay for it. They will still turn a profit. The CEOs will still be good. And they'll still have a successful company. And they can pay each of their employees two extra dollars an hour, something like employees are the same, I will start paying them the same. I'm not saying they pay them the same as everybody should be equal. No, I'm saying they can be paid additional it is a function of productivity. Do you want me to try to measure productivity on the individual level? Do you know how hard that would be? It'll be by like department. So, okay. Then when every employee in that department is the same, I will pay them the same. Until then, this has got to be a hostile negotiation. It's got to be you want your thing, and you come in, and you threaten me with nuclear war, because you're going to leave. And then I go, "Fuck, I do or like I care about losing this person, or I don't." Mhm. Here's a really gross thing all of you are going to hate, and this is the hard part about being somebody on camera with employees. I know every person in this company, whether I have fear of loss or not. And if I don't have fear of loss, you have no negotiating power. If I have fear of loss, you have negotiating power. And the hard truth is, it comes down to what you can deliver for the company. But the bad news is, all of you [ __ ] are different. You're in different roles that can impact company in different ways. You have different skill sets, different levels of intellect, different soft impact that like is hard to quantify. It just is, man. And I get that people want this to be cookie-cutter, and it's not. And so, the hard reality is, you got to go into the world knowing that the only way to make all of this stuff work is to fight. And to get good. And I get it, everybody wants to go be Norway. I don't [ __ ] want to be Norway. So, you can pitch me all day on having like an easy cushy country where [ __ ] is like taken care of, and [ __ ] chill in the spa, or whatever the [ __ ] they do, and build like four companies ever that have mattered, I'm not interested. I'm not interested. I want to be a part of the most badass company on planet Earth that innovates. We're going to send people to Mars, man. That's the game I want to play, and I want to build an army of people that are excited about that, that want to get their kids excited about that, that understand that you can become truly extraordinary in life, and that we all get a shot to become really strong. We all get a shot to build and create and to love to the depths of our souls, to fall in love with our career, to not do something because it's a job, to not resent Mondays, to build a life of passion where we get good at something that matters to us and other people, to pursue an honorable goal with everything that we have. I am not saying stack money to the ceiling. I'm saying get so good at something that matters to you, that helps you and other people, that your life mattered. That's what I'm pitching. And I'm saying those people aren't doing it. Their life might be easier, but I'm telling you right now, from my frame of reference, they are not living life to the fullest. To me, this is about seeing how far you can push your individual talents, because everybody can get better. It's what I call the only belief that matters. The only belief that matters is that if I put time and energy into getting better at something, I will actually get better. Find those things you want to get better at. Progress is a foundational pillar to human happiness. If you are not making progress towards a goal that matters to you, you will feel a profound sense of disease. That doesn't mean work around the clock. I'm not pitching that, but it means commit yourself to love, commit yourself to family, and commit yourself to building something that matters to you, your skill set in some way, to contribute to yourself and to others.