Bonnie Weinstein Doesn't Understand Economics (and neither does the New York Times)

 

Cartoon posted by Zohran Mamdani in 2020

This post is about the lead article in Socialist Viewpoint by Bonnie Weinstein entitled Guns vs. Butter—It’s Our Choice. But before I get there I need to quickly explain the nine-month gap since my last blog post. 

[The short answer is cancer. The good news is that I am now completely cancer-free. I'm no longer getting chemo or immunotherapy or radiation. It's been a long road to get here, involving surgery, chemo, occupational- and physical- therapy. Because of the cancer I have lost the use of my thumb and two fingers on my right hand, meaning that I am no longer the fast touch typist that I used to be. Thanks to all that therapy I have recovered enough that I can type at about half speed. And that's fast enough--though when it comes to typing I'm no match for any of my Trotskyist friends except--perhaps--Jack Barnes.]

Whether measured by typing speed or quality writing, Comrade Weinstein is in every respect my equal or better. But she knows nothing about economics--and apparently neither does the New York Times. She writes:

A March 2, 2026, New York Times article by Katie Benner and Steven Rich, titled, “Five Takeaways on America’s Boom in Billionaires” included these facts:

• "Supercharged by Trump-era tax cuts and other policies that favor the rich, America’s wealthy minority has more power over the country than at any time in the last century.
• The richest Americans saw their net worth soar by 120 percent from 2017 to 2025
• The top one percent of American households, which have a minimum net worth of $11.1 million, now collectively own about $25.6 trillion worth of stocks and mutual funds, the same amount as the remaining 99 percent of the country, according to the Federal Reserve.
• Of the $25.6 trillion worth of stock owned by the one percent, more than half is in the hands of the top 0.1 percent.”
• And as for corporations, “Typically, fewer than one percent of corporations now account for more than 90 percent of corporate profits.”

I don't argue with her data, and unlike her fellow Trotskyists she actually cites her sources!

Ms. Weinstein's third bullet tells us that the top 1% own roughly half of all stocks and mutual funds. Most of the other half is owned by the upper middle class--or approximately the top 20%. They can be loosely defined as households that have a net worth of more than $1 million in assets, not including their primary residence. These are mostly people either retired or near retirement, who have spent their working lives paying into their 401K accounts. Some are younger who have well-paying jobs, while fewer are people of all ages who live very frugally and save most of what they earn, regardless of income.

Comrade Bonnie's statement--that the top 1% own half of all publicly traded assets in this country--is true. What she fails to point out is that the vast majority of assets are not publicly traded, ie, don't show up on any stock exchange. Walk down any busy street in Manhattan, and almost all of the restaurants you see are small businesses--where Mom does the cooking and Pop manages the front of the house. Yes, busy places hire employees--Mom & Pop can't do all the work themselves--but they're a long way from being listed on Nasdaq.

Only a small fraction of US companies are traded on exchanges. According to ChatGPT (for this and all subsequent data) the total market capitalization of publicly traded corporations in 2025 was between $60 - 65 trillion--of which half is owned by the top 1%. The price/earnings ratio for all public companies is about 21, meaning that companies are typically valued at 21 times earnings. That corresponds to about a 5% return on investment.

GDP is the measure of how much a society consumes in one year--ie, it is the total profit for the entire economy--which was about $31 trillion in 2025. Using the same PE ratio as for publicly traded companies, then the total capitalization of the economy as a whole will be 21 x $31 trillion, or $651 trillion! The fraction of that owned by the top 1% is ($25.6 trillion/$651 trillion) equals a bit under 4%. 

That's certainly a low estimate since the top 1% own many assets that aren't publicly traded, such as their homes and vacation homes, private jets, private businesses (such as, until very recently, SpaceX), etc. So increase the proportion to perhaps 10% or 15% of the economy that is owned by the top 1%. 

Being a Marxist, Ms. Weinstein is likely under the illusion that GDP measures total production in a given year. This is not correct: GDP is a measure of total consumption in a given year. Only final sales to the consumer count--eg, when a consumer buys a new car, that adds to GDP, but the sale of auto parts to the assembly plant does not contribute to GDP. When the cash register rings for the final sale to the individual customer is GDP incremented.

In addition to consumption, investment also adds to GDP. Investment refers to the building or purchasing of new plant and equipment--and should not be confused with the common use of the word, as in investing in the stock market. The latter involves no new plant or equipment, but is merely trading assets with other people. Marx accurately termed money saved in the stock market as fictitious capital, ie, it does not imply any real increase in production.

So it is surely weird that Comrade Bonnie measures the wealth of the billionaire class by citing the value of their fictitious wealth. And the term fits, since Elon Musk's net worth can fluctuate by trillions of dollars per day depending on how the stock market does--it's hard to get more fictitious than that. So claiming that Elon is obscenely wealthy due to his huge stash of fictitious money seems ill-placed.

Since GDP is based on consumption, a much better comparison is to measure the Musk family's consumption compared to the rest of ours. And by that measure as well, Mr. Musk is wealthy, but nowhere near as obscenely so as his fictitious wealth might suggest. 

He likely doesn't eat any more than other citizens, though perhaps he consumes more expensive ingredients. Let's hypothetically double his food budget.

Mr. Musk lives in a mighty fine house--for which a top-of-line model sells for about $25 million. Perhaps he owns 2 or 3 or 10 such houses, but he can only live in one at a time. Let's say he has a primary residence and also a vacation home, for a total value of $50 million--the remainder are best described as a store of savings. The imputed rent for real estate of that value is about $2.5 million annually. Likewise for vehicles--he may own a whole warehouse full of expensive cars, but he can only drive one at a time. Suppose he buys one $500,000 car every year for his own use. More, he travels on his own private jet, but most of this travel is a business expense. Nevertheless, suppose he splurges on vacations to the tune of $2 million annually. Etc.

No matter how you slice or dice it, it is impossible to imagine Mr. Musk spends more than $50 million annually on personal consumption--ie, his share of annual GDP. If the median family consumes roughly $62,000/annually, then Elon consumes about 800x more than the average American family. That's his drain on the American economy. The remainder of his wealth--fictitious or otherwise--is used to build products for other consumers.

So yes, Mr. Musk is a rich man, though he doesn't look at all like the rich guy in the cartoon. He doesn't behave like the cartoon guy either. The point is that Comrade Bonnie has absolutely no clue how American capitalism actually works.

Further Reading:

• Cosmetics, Cuba & Mary-Alice Waters
• "Primacy of the Working Class"
• Working on the Railroad