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It was difficult for me to watch the speech, on Friday, when my government slashed the taxes of the rich. I was cooking porridge, when it happened, on the fifth floor of a block of luxury apartments, perched over a peaceful marina, with a view of the glistening skyscrapers of London’s financial district, where I used to work.
I retired a while ago, when I was 27, so it’s been a while since I was in the £150,000+ income bracket that has just seen their taxes collapse and I won’t personally benefit from the new, lower tax rates for super-high-income earners. But as a retired multi-millionaire, it will not be me who feels the pain of this mini-budget.
So why was it difficult for me to watch?
The answer lies in how it was that I came to be a multi-millionaire. I was not always rich. In fact, when I was young, I was very poor. I shared a tiny, crowded bedroom, in a tiny crowded house, in a tiny crowded street, with high-speed trains that rattled the window frames from morning till night.
When I was 20, I won a card game. The prize was a trading job for Citibank. I started that job in 2008, and by 2011 I was the bank’s most profitable trader in the world. I did that by betting that growing inequality would destroy the American and British economies forever, that there would never be a meaningful recovery, and that living standards would fall–forever, interminably.
So it was difficult for me to watch the speech, on Friday, as high-masted boats sailed by my windows, and the morning sun sparkled on the water. It was hard because I know what it means.
It means another decade of a failing economy. It means parents skipping meals, so their children can eat. It means cold homes. It means kids who would like to study art or literature or politics instead not going to university, because they can’t afford it. Not me, of course. Not my kids. Other people’s kids. Kids who live a three-minute walk from my flat. Kids who live in small crowded houses, as I did. Kids who can’t see the boats on the marina, as I can.
Don’t think that this can’t happen in your country. It can happen. It is happening.
It is not just in my country–the United Kingdom, this cold grey island that was once the richest in the world–where inequality is increasing. It is not just on this island where tax rates for the richest are decreasing, and the very richest are often legally able to avoid paying any tax at all. It is happening in your country too.
The last three years have seen the largest and fastest-ever increase in inequality in the recent history of the world. The average American billionaire doubled their wealth in just one year from 2020 to 2021. Then came a huge boom in inflation that savaged the living standards of the poorest families while the American stock market increased by 120% in less than two years.
I have friends who come from where I come from. They are bright and they are hardworking. They went to good universities and they have good jobs with high salaries. They live with their parents and some of them sleep on their mom’s sofas. They do it to save money on rent so that they can save every penny up and buy a house.
Interest rates in the U.K. are now expected to rise to 6%, so my friends will never be able to buy those houses. The average wealthy person in my country has accumulated over £100,000 cash in the last three years. They will give that money to their children and their children will buy the houses instead, and my hardworking, intelligent friends will never own property–nor will their children and grandchildren.
That is what happens when you slash taxation on the richest and allow inequality to explode. Your economies die, and your children don’t eat, and they wear thick jumpers, as I did, in the winter, and they shiver, with their families, in cold homes.
Meanwhile, someone like me will be sitting in a skyscraper, just a 15-minute walk away, betting on it, and that person will become a millionaire.
Then they’ll retire and they’ll buy a luxury apartment, overlooking a marina, and they’ll sit on a huge sofa and eat porridge, and they’ll watch the budget and they’ll cry.
And in the houses down the road, the mom doesn’t eat, and she hopes the children don’t notice. But they do.
Gary Stevenson is an inequality economist and a former trader.
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