How Rich Are You?

 

So, Joe Biden has chosen Kamala Harris to be his Vice President.

Now the world will start looking at who she is. Republicans will try to paint her as an out-of-control radical liberal without offering any proof, while her supporters will declare the election is all-but-won, then remind people not to be overconfident.

But, before we spend the next three months going where the political winds blow us, maybe it’s time to take a few minutes to look at the place she came from - the United States Senate.

That’s a legislative body in Washington, and many of them are millionaires or multi-millionaires.

Nearly half of the Senate’s Republicans recently stopped the extension of unemployment benefits, claiming $600 a week was way too much, and that out-of-work people could easily get by on $400.

Giving them more money, they argued, would only keep people from looking for work. Then President Trump explained he only wanted to pay $300 - individual states could make up the rest - even though most states haven’t budgeted the money to do it.

Before we start going into some details, let me ask a question. How rich are you? I’ll ask it again later, in a slightly different way.

(Just write the answer on a piece of paper, or dictate it to your secretary. How you answer might be interesting.)

Now, let’s look at the Senate, that exclusive club for millionaires who occasionally let poorer folks join. Of course, we have to take their word for it. They report their own wealth.

We know the annual salary for every member of Congress is more than $174,000 a year. Many Senators get extra pay for heading committees and other things. And, they get expenses - something called an Official Personnel and Office Expense Account.

Most Senators get more than $3 million a year, for things like office space in their home state, mobile office space and furniture.  Heck, some Senators used to claim some of that money for an office in their home. You see why it’s a little difficult figuring out how much they actually earn.

Calculating a Senator’s net worth - that’s everything they own, less everything they owe - is also hard. If you’re married and your spouse owns half of the house, how do you figure out the worth? What’s a stock option worth if you haven’t exercised it yet? What about the money you have in a blind trust? See why the numbers are soft?

There are, of course, lists. Many lists. Mostly, they have similar figures, based on public records.

Surprisingly, the wealthiest Senators are all Democrats and all had thriving law practices before going into politics.

Mark Warner of Virginia is considered the wealthiest Senator, with a net worth estimated at more than $90 million.

Richard Blumenthal - a former Connecticut Attorney General - comes in second at $70 million, then Dianne Feinstein at nearly $60 million.   Bob Corker, the Tennessee Republican, a prominent businessman, is  worth about $23 million.

All of which makes me wonder a bit about Arkansas Republican Tom Cotton, a lawyer who has been in the Senate since 2015, and whose net worth is listed as between $100,000 and $1 million.

 But, whether they have $5 million or $10 million or more than $50 million, there is something a little odd about watching wealthy Senators unable to pass an extension of unemployment benefits.

Admittedly, the Democrats in the House of Representatives voted for one more than two months ago, and all the Democratic Senators support it.

So, just what are those reluctant Republicans thinking about? It seems a little tacky to create so much misery for a lousy $200 a week, when you get a big pay check and only work in Washington an average of 165 days a year.

Can’t they imagine what it’s like not having enough money to pay the rent and buy food because their business closed down? That’s why people are unemployed. 

Maybe they believe that, some day soon, all the businesses will re-open, all the customers will magically come back, and all the banks will make a fortune on new loans to the people who are offered new jobs, even if they will be making less than they used to. After all, they get deeper in debt every week, and that debt doesn’t away.

Sen. Ron Johnson (R-WI) said he wants to cap the benefit so people don't collect any more in unemployment than they were making while working. 

The point here is that it’s embarrassing to see millionaire Republicans argue about giving people $600 a week, which - if they saved every single dollar - would net a remarkable $1 million in just about 30 years. If they don’t waste it on food or rent or clothes. Or taxes.

Now, at the risk of sounding like an old-fashioned Communist - and Communism has a lot more problems than America’s economic system - there is one problem inherent in wide-open Capitalism. It concentrates capital. 

Every year, money flows from the poor to the rich, stopping briefly at the well-off before going up and up and up to the one per-cent. That’s the very idea behind Capitalism - concentrate the wealth, invest it, and everyone is better off. At least, the shareholders are.

To go back to Adam Smith, if a thousand people chip in a couple of dollars each, you can buy a machine that will make things faster and cheaper. All the investors get the profits, and we are in the Industrial Age.

But, right now, nearly 25 per-cent of our nation’s wealth is owned by less than one per-cent of our population. They don’t shop in our local stores, they don’t pay taxes in our cities and towns. It is truly a wonder.

Look at it another way. The Federal Reserve estimated that the one per-centers controlled more than 38 per-cent of the nation’s wealth. (they get to vote on corporate boards).

So where does it leave us? Well, if you divided all the wealth equally among all the people, the average net worth of American families would be $692,000. But average doesn’t work. The median - the point where half the families have more and half have less - is only $97,300.

Crunch the numbers a little more, and you will see that 70 per-cent of us collectively own a bit less less than 10 percent of the nation’s total wealth. No matter how much overtime you work, you won’t really get ahead. In fact, the 40 per-cent of families at the bottom of the economic heap falls further and further behind every year - and that’s not counting the impact of the virus.

So, back to my question. How wealthy are you?

I asked because people tend to exaggerate a bit when asked about money. But, they are also more modest at the edges. Rich people often say they are well off. Poor people say they are in good shape, which often translates as “I can pay my bills this month.”

If you want to be middle class nowadays, you have to own a house that is worth around $300,000 or so, since a home is the single most expensive purchase most families ever make.

Which, by the way, is a good yardstick. If you want to call yourself truly rich, you have to own something that is worth more than your house. Maybe a company. Maybe a private island. Maybe some real estate that is 40 stories tall.

Now, here’s a funny thing. In many places, where real estate prices are sky high, lots of people own homes worth $250,000 to $350,000. But a lot of them are house rich and cash poor.

Taxes are sky high, too. And some of them are now out of work, or have closed their business. And, they really need that $2,400 a month to cover their bills.

But, giving them $600 a week will probably mean they will stop looking for work. Goodness knows, they might otherwise find something paying $7.50 an hour, even if they are 50 or 60 years old.

At least a lot of Republicans in the Senate could sleep well if they did.