Grasping the Scales of Wealth Inequality

by Brian T. Lynch, MSW

The human brain has inherent limitations built-in when it comes to imagining the relative differences of huge numbers, whether they are describing the very small or the very large. Genetically speaking, we don’t have the intuitive capacity to handle very large numbers. We distort the scale and tend to group together orders of magnitude that aren’t at all alike. The best we can do is evaluate good, often visual comparatives.

Another brain limiting feature is that we tend to perceive things by putting similar things into the same buckets in order to make sense of a world of infinite variability. If we see a color that is red, slightly bluish red or slightly red-orange, our brain puts the visual input into the red bucket, and that is what we see.

In the same way, when we see big numbers or even bigger numbers we tend to group them in the big numbers bucket without really noticing just how out of scale our perceptions might be.

This human limitation doesn’t often matter in the day-to-day experience of most people, but it matters a great deal when it comes to understanding concepts such as our growing wealth inequality. There is at least a thousand-fold difference between a millionaire and a billionaire, yet most of us put them both in the “rich” bucket.

If we say that one dollar equals one unit of social power (social power being the ability to coordinate the actions of other, as a quick and dirty definition), then a “rich” billionaire is a thousand times more powerful than a “rich” millionaire, but it doesn’t seem that way to us. Many US billionaires have more than 20 billion dollars and they are major influencers in government policy and political decision making, yet we see them as merely rich.

So, this is an attempt to put wealth into a proper sense of scale using visual comparisons.

BASED ON THE WEIGHT OF A $1 BILL

$100 in singles

A single US dollar bill (a US Treasury note) weighs .04 ounces. Stack a hundred $1 bills together and they weigh just 4 ounces. In other words, a hundred dollars in singles weighs 4 ounces. That happens to be the exact weight of my favorite sandwich, peanut butter and jelly. I would never pay for my PBJ according to its weight in dollar bills, but to me, it tastes like a hundred bucks.



 



$1,000

A thousand one-dollar bills, or 10 stacks of one-hundred US Treasury notes, weighs as much as 10 peanut butter and jelly sandwiches, or 2.5 pounds. That weight is equal to a very full glass of water in a pint-sized beer glass. But, beer weights less than water in case you happen to be staring at your fresh pint of Guinness right now.





$1,000,000

A million dollars is a thousand times more than a thousand dollars. It’s a big leap, so all the weights go way up. A million one-dollar US Treasury notes weigh 2.5 tons (or the same as 10,000 PBJs). Your average pickup trucks couldn’t haul that much weight. You would need two ¾-ton pickups to haul a million one-dollar bills around town. And if you do, you really need to trust that other driver.


 

$1,000,000,000

A billion dollars is another giant leap. It isn't in the same bucket as a million bucks at all. It is a thousand times more than a million dollars. A billion US treasury notes would weigh a whopping 2,500 tons (ten-million PBJs). That is just shy of the weight of two fully grown Sierra Redwood trees with trunks so wide you could carve out a tunnel through them and drive the two pick-up trucks above right under the trunks. Keep in mind the weight of a million Treasury notes is only the cargo in the bed of two pickups, not the trucks themselves.  I visited the Redwood Forest last summer and I still can't imagine the weight of those trees.

The point here is to help everyone see that billionaires and millionaires are very different species. We must be put them in a very different bucket when we think about wealth and wealth inequality. Most of the billionaires in the world are here in the USA. We have over 500 of them. Together they control almost all of the wealth in this country.  They exsert an unimaginable influence over our government. If 90% of the people in this country want sensible gun control legislation and can't get it passed in Congress, it is because of the enormous power of a handful of uber-wealthy individuals who control enormous wealth and power.

So, the next time you pick up a peanut butter and jelly sandwich, remember that someone like Jeff Bezos privately owns the dollar-weight equivalent of a billion PBJs and Michael Bloomberg's wealth in the weight of a dollar bill is equal to the weight of 120 redwood trees.

BASED ON THICKNESS OF A $100 BILL

Instead of a US Treasury Note's weight, how do millionaires and billionaires stack up based on the thickness of a $100 dollar bill?  If you are of average height, make two stacks of $100 bills the hight of your knee cap. That is approximately one million dollars. Now keep stacking those two piles of $100 bills until they are about 400 feet above the Empire State Building. Congratulations, now you have your first one-billion dollars. And if you are Michael Bloomberg, you have about 160 stacks of bills higher than the Empire State Building.

And here is why it matters so much in our republic, in the words of Franklin D. Roosevelt:

"The first truth is that the liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than their democratic state itself. That, in its essence, is fascism — ownership of government by an individual, by a group, or by any other controlling private power." 

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2/28/2020 - I have added the following video link. It is a fantastic visual aid in understanding the scale of wealth inequality and I highly recommend you watch it.

https://twitter.com/i/status/1233405556796403714

And here are a few graphs to consider when thinking about Wealth and Income Inequality

Data Analysis Shows a Dem Centrist Candidate Loses

by Brian T. Lynch, MSW

Here’s a quick summary of how U.S. politics has evolved over the last 50 years, according to a massive analysis of exit polling data conducted by economist, Thomas Picketty.

The ultra-wealthy elites were always conservatives on the political right in the 20th Century. They were traditionally represented by the Republican Party. The lower economic classes were always progressives on the political left represented by the Democrats.

Massive income growth by the wealthiest citizens and changing patterns of wealth accumulation at the top of the scale created a new, high education/high wealth class of elites on the political left. Their power and special interests realigned the priorities of the Democratic Party and shifted focus away from those on the lower end of the economic scale. For over 20 years Democratic candidates for election barely ever mentioned America’s poor. This is especially true for America’s rural poor. With neither party representing the interests of the working class or the poor, these citizens became disaffected and radicalized against elites in both parties, and also against the federal government in general. This gave rise to the Tea Party movement. A vast swath of the Democratic base switched allegiance and became the radical Republican base we have today.

To attract and hold on to these radicalized low wealth/low education voters the industrialist elites have funded and vastly expanded the alt-right media machines to appeal to their radical base. They also pushed radical policies to appease and manipulate their new base. The Republican party today would not have enough members to be a national party if this shift had not taken place.

So, this is how United States politics stands nearly 20 years into the 21st Century. On the Right, we have a radicalized Republican Party comprised of the same ultra-wealthy industrialists at its core. But today they have created this subversive coalition of traditional conservatives and a pantheon of disaffected, low education/low wealth former Democrats. These voters at the lower half of the economic scale include a disparate collection of alt-media radicalized single-issue voters, fringe groups, hate groups, and the disaffected rural poor. All of these groups have otherwise unpopular goals, which the traditional party elites exploit by pushing a radical Republican agenda that is harmful to a majority of Americans, but not to their own bottom line.

On the left, we have a modulated Democratic Party unwilling to challenge the influence and power of the ultra-wealthy, left-leaning elites whose economic interests are best served by maintaining the status quo. The Party is no longer the champion of the poor and marginalized citizens that it once was. The party fauns over the “middle-class” (the upper 40% on the economic scale) in order to hang on to them while strategically ignoring the poor and working-class that once formed its base. Instead, it panders to its former base voters without actually pushing an agenda that would improve their lives.

It is for these reasons that Picketty draws the conclusion that a centrist Democratic candidate for President may be a losing strategy. A centrist who tries to thread the needle between ultra-wealthy elites on the left, and the poor and working classes at the base, will neither energize progressives at the bottom of the income scale nor win over the disaffected voters who have turned to the Republican Party to make themselves heard. It is against these new political realities that Democratic progressives must come to terms before it is too late.

Campaign Finance Laws Discriminates Against Worker and Voters

By Brian T. Lynch, MSW

Two people work in a smoke shop on the South Side of Chicago. One of them is the owner. What principle of law says that the owner of the shop gets to donate three times as much to a political candidate than the employee? How can campaign finance law be allowed to discriminate against workers like that?

On April 21, 2018, the Chicago Tribune reported that Mayor Rahm Emanuel added $1.7 million to his campaign in a single day. The explanation that followed encapsulates what’s wrong with our campaign finance laws. As in other states, the Illinois campaign donation system is set up like a board game, specifically a corporate board game.

If you are an actual carbon based person in Illinois you cannot donate more than $5,600 to a political campaign, unless you own a business. If you own a business you can contribute twice that amount on behalf of your business. And if you register as a political action group you can donate nearly 10 times the individual contribution limit, up to $55,400. These campaign limits are entirely lifted if one candidate in a race decides to give their campaign $100,000 of their own money.

That’s what happened in Chicago. Emanuel’s Republican opponent, Willie Wilson, boosted his campaign with $100,000 of his own money. Twenty-four hours later the Mayor added a million dollars to his campaign from just three wealthy donors plus another $700,000 from other donors.

In the Citizen’s United decision the US Supreme Court said, in effect, that money is a form of free speech. This may be true in some intellectual perspective of the court, but if true in the real world, how can there be a $5,600 free speech limit on voters? How can there be any limits at all?

In our Republic we have this bedrock principle that says, “One person, One vote.” Everyone has an equal say in who represents their interests. Corporate governance operates on a different principle that says, “One share, One vote.” You get one vote with every share of the company you buy. The bigger your financial stake is, the greater your say is within the company. Wealthy shareholders like this system because their voting power is proportional to their financial power.

The concept of one person, one vote is an anathema to them in our democracy. They feel their greater financial stake in the economy should also entitle them to a greater political say in our government. This is why they have rigged the campaign finance system.

As a thought experiment, try imposing the “One person, One vote” principle to campaign financing. One person’s donation limit in Illinois is $5,600. That means one vote is equal to that amount or less, mostly less. Most voters don’t contribute to political campaigns. Even if they do, the individual donation limit may be well beyond their means. The median income for a family of four is close to $56,000 a year, so a maximum political donation would cost them 10% of their annual income. Even a 1% donation would be well beyond their means. One tenth of one percent of their income, or $56 dollars, might be feasible for most voters, and this amount is 100 times the current limit.

If you go with the “$5,600 limit equals one vote” rule, then being a business owner gives you three votes, one personal vote and two votes for your business. Join another business owner to form a political action committee you get eight votes, five votes for your half of the PAC, three for your business and one personal vote.

Then Willie Wilson upsets the apple cart in Chicago by donating $100k to his campaign. Now just three wealthy donors get a total of 180 votes or more for Mayor Emanuel’s campaign. The actual impact on how a candidate might responds to donors is enhanced by the fact that tens of thousands of voters contribute nothing. Additionally, because individual donor limits are 100 times what the average voter can afford, the impact of those three big donors in the mayor’s race is more like 180,000 votes. So, if you are Rahn Emanuel, who are you going to listen to?

Money is not free speech. Money is power.

If we agreed to pair the power of money to the power of the vote, then one voting share should have the same price tag for every eligible voter. It should not favor businesses or the wealthy as it does now in our corporate governance style of campaign finance. This also means only eligible voters should be able to donate; No PACs or businesses. If a businessman or organization wants to lobby for a special interest, they should lobby directly with the people to gain influence rather than lobbying our politicians. It would mean that fair share campaign finance limits would either be equal and affordable for everyone, or without donation limits but with maximum transparency so every voter can see exactly which candidates the big donors are buying.