A few thoughts on "Wealth Inequality"

YouTube is rife with progressives railing about "Wealth Inequity". The most strident say "There will be no peace without justice", which is a not-so-veiled threat. They are very clear: If you have more than they have, they want it and are not afraid to use violence to get it!

Wealth vs Income

People who are economically illiterate use the terms "Wealth" and "Income" interchangeably but there are some key differences.

Income is the amount of money you realize within a given time-period. It is typically in units of dollars-per-hour or dollars-per-month or dollars-per-year.

Wealth, in the financial sense, is the amount of dollars that could be realized if all of your assets were liquidated and turned into dollars.

Elon Musk's wealth might be valued at $346 billion dollars but he might only realize $20 million dollars a year for pocket money. That is 0.006% of his estimated wealth.

Another complication is that if Elon Musk sold off his stock portfolio it would probably torpedo the value of the stocks he owned. If he was forced to liquidate quickly, a lack of buyers (anticipating that Musk would no longer participate as an executive in those companies) might cause the value of the stocks to drop to 10% or even lower of their present value.

So, to keep things simple, let's just talk about income.

"Justice starts with a single step"

If Mr Musk were to level-up his income with the typical household income of Austin, Texas then then each household in Austin would receive a check for about $65 every year.

Then, the Social Justice Warrior (who likely lives in an eastern, legacy city like Philadelphia or Baltimore) pipes up "No, no, NO! Musk must pay EVERY person who are members of the groups that his identity-group damaged. That includes people in places like Philadelphia, Baltimore and Jackson Mississippi. AND, it can't be just Elon Musk. It has to be EVERYBODY who has income that is more than the average for the group!!!"

Point taken

Every person in the United States who has more, realized, per-capita income than the average income of the United States and Africa must write a check to level that up.

And since a single mother in Baltimore with two children is realizing the income-equivalent of $60k, that means that she is going to have to write a check for approximately $53k to level-up with the 1.5 Billion people in Africa making the PPP GDP/capita/year of $6k with her $60k.

OK, I get that I probably lost many of you with that last paragraph. Let me put the bread-crumbs closer together.

Africa was damaged when slave-traders took their best-and-brightest over to the Western Hemisphere. That means they are in the pool that was damaged and in-line for "reparations". They are just as much of a "victim" as that mom in Jackson, Mississippi.

There are 4.5 people in Africa for every person in the United States. The average "income" in Africa is the equivalent of about $6k/year vs roughly +$60k (if you include transfers and entitlements to "low income" US citizens) in the US. So even the poorest, inner-city mother of two children who receiving over $60k in services, grants and other benefits has 10X more income than the typical Nigerian.

On another axis, in Africa there are approximately 60 motor vehicles per thousand people while in the United States there are 850 motor vehicles per thousand. You might say "Well, I don't own a vehicle so that would not impact me" but consider that motor vehicles deliver food to your grocery store and the Uber or Lyft driver you summons when you need a ride DOES own a vehicle. Imagine how hard it would be to get a ride if you wanted to go more than ten miles if there were fewer than 10% as many cars per person. Leveling-up would entail shipping the majority of our automobiles over to Africa.

While the Social Justice Warriors are ginning up outrage over the inequities between the billionaires and their peer-group, they never consider that on a global scale that they are incredibly wealthy. Or maybe it did occur to them but because drawing the lines around the 'control volume' in that fashion would result in a HUGE loss in income to them, they wish the fact into oblivion.