Alexandria Ocasio-Cortez, appearing on a podcast this week, argued that it is impossible to legitimately earn a billion dollars, that anyone who accumulates that level of wealth must have done so through labor law violations, market manipulation, or paying workers less than they are worth.
Stephen Moore, economist and co-author of The Trump Economic Miracle, joined Dan Proft on Chicago’s Morning Answer to respond to that argument and work through new red state, blue state migration data from his Vote With Your Feet project at Unleash Prosperity.
Moore said the research on wealth creation is actually quite clear on the point AOC is making, and the data contradicts her entirely. Studies consistently show that when someone builds a company and becomes a billionaire, approximately eighty to ninety percent of the total value created does not go to the founder. It goes to consumers, employees, suppliers, and the broader economy in the form of better products, lower prices, and new industries. He offered the late Fred Smith, founder of FedEx, as an illustration. Smith served in Vietnam, returned, wrote a business school thesis proposing an overnight global package delivery system, received a C-minus from academics who said it would never work, and built arguably the greatest transportation company in history. The enormous wealth Smith accumulated was the residual of a value creation that benefited hundreds of millions of people who needed packages delivered reliably and quickly. The founder kept a fraction of what he generated.
He said what is genuinely frightening is the cultural trajectory that AOC’s rhetoric both reflects and accelerates. The murder of the United Healthcare CEO, the arsonist who set the Pacific Palisades fire inspired by that killing, the growing rhetorical normalization of violence against wealthy people all point toward something more dangerous than bad policy. Moore said he has known many billionaires over his career and said they are in general responsible for enormous amounts of employment, philanthropy, and civic investment. He cited the analysis showing that in the three years since Ken Griffin moved Citadel to Miami, Chicago and Illinois have absorbed an $846 million loss in tax revenue, $2.65 billion in lost spending, and a total three-and-a-half-billion-dollar economic hit, not counting the hundreds of millions Griffin had provided in charitable giving to institutions ranging from the Museum of Science and Industry to bike trails to homeless shelters.
On the broader migration data from the IRS covering 2012 to 2023, Moore said blue states collectively lost approximately two trillion dollars in adjusted gross income over that period while red states gained commensurately. Florida captured nearly half the total gain, and Moore said he was just in Miami where the skyline now rivals New York’s in size and construction activity. He said the pattern of states doubling down on tax increases as productive residents leave is consistent across every blue state, and that the most striking recent example is Washington State, which was the only blue state operating without an income tax, a policy that made it home to Amazon, Microsoft, and Starbucks. The state recently enacted what Moore said will rank among the highest income taxes in the country. He predicted within five years that concentration of major technology companies in Seattle will have largely dispersed to lower-tax states, which he said is the most straightforward possible demonstration of the Laffer Curve principle that taxing something produces less of it.
He said the proposed corporate abandonment law being floated by Chicago aldermen in response to Walgreens closing a South Side store is the logical endpoint of the political philosophy driving all of these outcomes. The store told the city for five years that unaddressed theft and crime would force it to close. The city did nothing. The store closed. The political response is to propose making it a crime to leave. Moore compared it to the East German model, noting that regimes that build walls to keep people in never attract the people they need in the first place.
He closed by noting the first offices of Nvidia, Google, Apple, Microsoft, Amazon, and Meta were all family homes or garages, with those six companies now carrying a combined market cap of approximately twenty-one trillion dollars. He said if the goal is to produce more of that kind of wealth creation, the policy answer is straightforward: do not punish it. Of the ten largest technology companies in the world, nine are American. That is not an accident. It is the product of a system that allowed people to get rich by creating things other people want to buy, and dismantling that system in the name of equity will produce equity and deprivation rather than equity and prosperity.