Nikole Hannah-Jones is a genius.
We know that because the McArthur Foundation gave her a “genius grant.” She is renowned worldwide, and is currently a professor at Howard University and a New York Times columnist.
Nikole Hannah-Jones is an award-winning investigative reporter who covers civil rights and racial injustice for The New York Times Magazine and the Knight Chair in Race and Journalism at Howard University where she is the founding director of the Center for Journalism & Democracy.
Her reporting has earned her the Pulitzer Prize, the MacArthur “Genius” Grant, the Knight Award for Public Service, the Peabody Award, two George Polk awards, the National Magazine Award three times and an Emmy. She is a Society of American Historians Fellow and a member of the Academy of Arts & Sciences.
Wowza. Impressive resume. I am a bit surprised he hasn’t gotten a Nobel Prize like Obama.
Hannah-Jones is the creator of the 1619 Project, the much admired and much-reviled historical fiction that the New York Times used to propagandize generations of schoolchildren.
While all this is impressive enough, Twitter denizens learned over the weekend that Hannah-Jones has yet another feather in her cap: an understanding of economics rivaling that of her colleague Paul Krugman.
I’ve wondered how much @Ducktales Scrooge McDuck & other cartoon depictions of the rich would would make people think they literally store their money in a gold vault & swim in it. Its astounding the lack of awareness of how people invest their money & that helps create jobs 🤦♀️ pic.twitter.com/W9Ch8sBIfQ
— Emily Ekins (@emilyekins) May 20, 2024
Ms. Hannah-Jones–may I call you Nikole?–wealth does not work this way at all.
There was a time–during feudalism in the West, for instance–when wealth came mainly through conquest and expanded through seizing others’ property. But in capitalist societies, wealth is literally created through invention, innovation, increased productivity, and building things that others desire and are willing to pay for.
Wealth does not magically grow. You cannot put money in a mattress and expect it to grow. Rather, the opposite is true. Because we have economies built on fiat currencies, wealth that is not invested quickly shrinks due to inflation. If you don’t invest that money to make it grow you quickly become impoverished.
You don’t have to go back to the creation of the federal reserve to get a visceral sense of how the value of a dollar declines over time. Just since Joe Biden became president our dollar’s value has declined about 20%–in just three years.
Our good friend Nikole doesn’t seem to understand this basic fact of life, and perhaps that is because she got rich because people handed her money for saying stupid things.
Saying stupid things is pretty easy, and people keep handing her money for doing it, so wealth creation is an alien concept.
Rich people got and remain rich by creating things and investing in the returns from their creativity. Generally speaking the greatest returns on investments come from the greatest acts of creativity, although often there is some luck involved. And, in recent years, the premium on innovation has been especially large.
People who just sit on their wealth, if they have enough of it, can live reasonably well because lives are short. But if you put all your wealth into, say, a pile of gold, you would get progressively poorer over time, even if the volatile price rises because you have to use that gold to keep consuming. The pile gets smaller and smaller as you use it.
This is the opposite of how our friend Nikole seems to think it works.
So, rich people who are not themselves innovating or creating lend their money to people who are. “Here, Elon, go build SpaceX.” And if the innovation takes off, everybody gets richer, including people who need cheaper access to space.
Wealth in the modern world isn’t acquired through conquest; it comes from creation. Even commodities are worthless unless people figure out how to grow or extract them most efficiently. Look at Venezuela, which kicked out the foreign oil companies and now has impoverished itself because its oil industry is a mess. It’s not the oil alone that is valuable–they still have the oil. It’s the ability to extract it and get it to market efficiently.
Paul Krugman has made a career out of being eternally wrong on economic matters, at least since the moment he earned his Nobel Prize. He famously predicted that Donald Trump’s election would destroy the economy and stock market. He was off by a bit on that prediction.
Nikola Hannah-Jones has apparently been learning her economics from the master. Both seem to fundamentally misunderstand what makes our economy tick.