Billionaires don't help the economy

Jan Svejnar, Guardian - Controlling for other relevant factors, such as the country’s level of income and education, ... countries could grow their economies faster if there were less money controlled by the uber-rich. This implies that economies could be more efficient if more money were allocated to people other than those at the top of the income and wealth pyramid.

Broadly speaking, billionaires come in two types – those who would not have made it without political connections (ie political cronies), and those who became billionaires because of their ingenuity, ability to innovate and willingness to take risks (ie the politically unconnected)...

We discovered that billionaire wealth that arises from being politically connected has a strongly negative effect on growth. In contrast, the effect of politically unconnected billionaire wealth on the overall economy is indistinguishable from zero. That means that billionaire cronies constrain economic growth, while billionaires who aren’t cronies on average don’t do so. ...

Americans, in particular, have been taught to think that billionaires have a positive effect on the economy. Why? Because they are “exceptional” people who have proved that they can accomplish great things. The key finding that, on average, they have an insignificant effect on growth prospects, even in the case of the politically unconnected, represents a huge negative surprise for supporters of the billionaire class.