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Robert Kiyosaki Why the Rich Get Richer

Robert Kiyosaki, Why the Rich Get Richer

As Capitalism Crumbles, U.S. Taxpayers Pick Up the Pieces

by Robert Kiyosaki

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Excellent (2236 Ratings)
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Posted on Tuesday, September 23, 2008, 12:00AM

As we all know, the world changed drastically on Sept. 11, 2001, when the twin towers of the World Trade Center fell.

This year, on the eve of Sept. 11, the twin towers of Fannie Mae and Freddie Mac crumbled. Then, on Sept. 15, Lehman Brothers and Merrill Lynch disappeared. Actually, that was a triple-tower collapse if you count AIG.

In a few years, the biggest pair of towers will collapse: Social Security and Medicare. Even today, they're looking shaky. How many ground zeros can we as people, a nation, and a world withstand before we admit something is very wrong with our global financial systems? What will it take to wake us up?

Government Can't Fix It

Personally, I believe the biggest it's a problem that so many Americans are looking to this year's presidential candidates, Barack Obama and John McCain, to save our financial system. How did we become so financially weak that we surrender our economic independence to politicians? Where does it say in the Constitution that the government should solve our financial problems?

And why have so many people throughout the world come to expect financial life-support from their political leaders? It seems most people will vote for anyone who promises a chicken in every pot and a guaranteed mortgage payment.

We're in the midst of a problem neither candidate can solve: A lack of comprehensive financial education in our school systems. What else explains the economic blunders committed by our political and financial leaders? Or why so many consumers are in debt up to their eyeballs? Or why millions of people expect a quick government fix of some kind?

Under Water

A few months ago, a friend of mine from Hawaii asked me if I wanted to buy his new powerboat with twin motors. Apparently, in late 2007, he purchased it brand new for approximately $85,000. His plan was to refinance his house when it appreciated in value and use the difference to pay for the boat.

Failing to obtain new financing, he called to ask me if I would buy the boat from him -- just take over the payments and it was mine. I passed, and the bank eventually repossessed his boat. Later, his wife called to tell me he's now having problems making his mortgage payments. Apparently, my friend planned to pay for his house the same way he planned on paying for the boat, by refinancing his debt.

I mention this story because it illustrates the problem Obama or McCain face: Limited financial education and diminished financial common sense. Apparently, my and the nation's business leaders all went to same school of finance.

A Cynical Aside

If you want to know why the towers of American capitalism are crumbling, I recommend reading "The Creature from Jekyll Island" by G. Edward Griffin. It's not an easy book to find, but once you start reading it's to put down. In fact, in many ways it's a murder mystery about the financial "murder" of the middle class.

A very important lesson in the book is how political leaders use financial spin to deceive the public. The very, very rich use the system to legally steal from the rest of us by appealing to our sense of patriotism. When our leaders say, "We're bailing out Fannie Mae and Freddie Mac because we want to protect the American people," they really mean "We're saving our rich friends."

All the bankers and politicians have to do is wave the red, white, and blue, play a few bars of "Yankee Doodle," and the masses get teary-eyed and pledge greater allegiance to legalized robbery. Yes, it's true that ignorance is bliss -- but ignorance is also expensive, and it cost us our freedom.

Freedom at Peril

A bailout can be different things. First, printing more money is a kind of bailout that leads to higher inflation. Rather than protecting people, it makes life for the poor and middle class more expensive. The other kind of bailout is protection for our rich and incompetent friends. If you or I fail at business, we fail. If we cheat and fail, we go to jail. But if you're rich and politically connected, your incompetence may be protected by a government bailout.

As a former Marine and a Vietnam War veteran, it saddens me to see some of the freedoms I thought I went to war to protect being stolen from us by bankers and politicians. Unfortunately, few Americans know the difference between the words "nationalize" and "socialize." Socialize means we turn more of our personal powers over to Big Brother, not free enterprise. It means we as a people grow weaker and need a higher power -- the same power that got us into this mess -- to protect us.

In short, when the towers of Fannie, Freddie, Merrill, Lehman, and AIG came crashing down, more came down than just money. What we're losing is the very freedom this country was founded on, and what most of the world yearns for.

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  • Yahoo! Finance User - Wednesday, September 24, 2008, 12:11AM ET  Report Abuse

    • Overall: 5/5

    Moral of the story is... the millions of idiots (likely you) out there in the US need to learn about finance and money. However, ignorance is bliss.

  • Yahoo! Finance User - Wednesday, September 24, 2008, 12:12AM ET  Report Abuse

    • Overall: 5/5

    Excellent in commenting on the special interests behind many political actions done "for the people."

  • Yahoo! Finance User - Wednesday, September 24, 2008, 12:13AM ET  Report Abuse

    • Overall: 5/5

    In reply to “Dear Main Street” by the Wall Street Journal Dear Wall Street and Washington, We Don’t Need Your Explanation. By Douglas Young Dear Whoever, No we are not trying to make sense of this whole thing, and no it is NOT over our heads. The problem is that it is over YOUR heads, and not very complicated. Say “greedy overpaid jerks” a dozen times and see if it doesn’t tick you off. Wait, don’t get frazzled, Stick with me though Wall Street, and I’ll explain to you what is going on here on Main Street, since you no longer come down here to conduct your business, you leave Park Avenue, go directly to the airport, jump on your leer jet and fly over to China or Mexico to save a buck! What is going on here is just plain common sense. Seems that in order to have common sense, you must make under $100,000 a year, once you cross that threshold, you must relinquish the common sense. This “GREAT BAILOUT” is just a new way to fork over Main Streets money to the greedy financial institutions and politicians who really hold the bag for this mess. Unfortunately, since Main Street has no more money, they are taking the money from the children playing on Main Street so that they may pay 10% higher taxes in the future, for a mess they are not responsible for. Wall Street, we know what is going on, Washington, you say that this will open up the credit markets so that banks will have money to lend businesses and people so that businesses can support their day to day operations, and people can have mortgages and auto loans. Washington, MAIN STREET IS BROKE! WALL STREET HAS GOTTEN EVERYTHING THAT MAIN STREET HAS EVER HAD. Let me explain…. Over the last 20 years, the prices of everything needed for us Main Streeters to survive has exploded, especially true in the last 5 years. The average wages have been all but stagnant for the last 20 years thanks to global free trade, and don’t hand me a line about your polls and statistics, a 16 year old just starting out is going to make the same $6.00 an hour that I made when I just started out 20 years ago. Raises average about 3% annually, and inflation is more like 16% annually once you factor in the two elements that all of your “financial annalists” throw out, food and fuel. It may be a small percentage of YOUR budget, and YOU can afford to just toss these figures, but it’s a substantial part of Main Streets budget. Here is the common sense, so pay close attention: when food and fuel are 20% of your budget and these prices double or more as they have over the last 5 years, it now becomes 40% of your budget, so if you make $500.00 a week (another thing Wall Street doesn’t understand is the difference between gross income and take home pay) and use to have $100.00 a week extra to buy things with, you no longer have that $100.00. Spread over 100 million people, that is 10 billion dollars a week! In case you haven’t realized, (you may want to confirm this with your chauffer) You can put that $100.00 In your gas tank in one fill-up. Insurance rates keep going up, taxes keep going up, costs of services keep going up, (have you called a plumber lately? Or inquired about college courses?) and then there is the financial sector, more fees and charges than bombs dropped in Iraq! Why in Gods name should I have to pay a $10.00 fee to pay my mortgage online????? I am eliminating the paperwork, travel, and just about any barrier to them getting my payment. It is getting wired directly to their account! But they will find a way to rip off Main Street just a little more. Credit card companies will double your balance in a few short months if you fall behind with outrageous fees and bogus charges, then wonder why you default. If someone is having a hard time making payments, punishing them with ridiculous fees and higher payments doesn’t make sense! It won’t work! You can’t get blood out of a stone! Give back what you stole from Main Street!

  • Yahoo! Finance User - Wednesday, September 24, 2008, 12:14AM ET  Report Abuse

    • Overall: 5/5

    "Government can't fix anything"

  • Yahoo! Finance User - Wednesday, September 24, 2008, 12:16AM ET  Report Abuse

    • Overall: 4/5

    good point...makes me wonder how to fill in the gap between the talk and the walk.

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