What’s a billion or two amongst friends or strangers? the morality of numbers


“How far is it to the moon?” I asked my colleague the other day. He answered, “250,000 miles.”

A quarter million miles. How can I imagine how far this really is? The local railroad station is a mile from my house. I live about 20 miles from Manhattan. New York is about 3,000 miles from the Pacific Ocean and if I went completely around the world, I would travel about 25,000 miles. So if I went around the earth ten times, that would be a quarter of a million.

The distance to the moon was a number I could grasp. I could count to a quarter million. It is about 3 days worth of seconds and, while I can’t stay awake for three days without sleep, it isn’t hard to imagine I could actually count that high.

The sun is further than the moon. How much further? The sun is about 90 million miles away. How long would it take to count 90 million seconds? One year is about 30 million seconds. So it would take me three years of counting seconds to get to 90 million. This is still something I can imagine—but barely.

Now I am trying to imagine the number a billion. It helps me to grasp this number by knowing that if I stayed awake and didn’t stop counting seconds, it would take 31 years and 8 months to get to a billion. A person reaches a billion seconds of life when they enter early middle age.

If you prefer thinking about minutes instead of seconds, the beginning of the Common Era, the time of Jesus, began about a billion minutes ago.

By this time, my imagination is faltering. The concept of a billion has begun to slip into an abstraction.

I have been thinking about numbers this week, specifically dollars, because I’ve filed my income tax and I thought about how much my wife and I make compared to other Americans.

Here are the latest figures I could find: The median income in the US is about $45,000. This means that half of the American population make more than this amount, half less. A family with two earners has a median income of a little less than $70,000. So far I can relate to these numbers.

There are approximately 146,000 (0.1%) households with incomes exceeding $1,500,000 a year. Even at that, the top 0.01% of households had incomes of $5,500,000 and accounted for 11,000 households.

So those households spent all five and a half billion dollars they earned just this year one dollar at a time it would take them about 175 years.

I also find it useful to put a name and a face to a number. The NY Times did that for me when it listed the top hedge fund moneymakers in 2010. John Paulson earned $4.9 billion (2009: $2.3 billion); Ray Dailo received $3.1 billion (2009: $400 million); James Simons received that same for the last two years, $2.5 billion; David Tepper, $2.2 billion (2009: $4 billion); and Steven Cohen $1.3 billion (2009:$1.4 billion).

The money is a combination of the value the manager has in investments, plus fees charged for managing the funds. Hedge fund managers make money even if the funds they manage lose money.

When I brought these figures to the attention of my students, most were appalled. But they didn’t think billionaires should be heavily taxed. Instead, they thought they should give away much of their fortunes, a la Bill and Melinda Gates and Warren Buffet.

Leon Cooperman, who made the list of top hedge fund managers for the first time this year, doesn’t intend to keep his fortune, either. “I’m giving it all away,” he said. He contributes to hospitals and a various charities, but most, it seems, goes to Columbia University, where he earned his business degree. “I’m very philanthropic toward Columbia, which opened the door to Wall Street for me. “I’m trying to give money away to the kinds of things that touched me during my lifetime.”

And there you have the problem with charitable giving (which I heartily endorse) as an alternative to taxes. Cooperman gives to that which has touched him. This is a good thing. Empathy is, after all, at the beginning of ethics. His empathy has been aroused and he is moved to action. But empathy can’t be the end of ethics, for there are many very worthy causes that don’t touch him or any other super-wealthy person, causes and people just as deserving as any that Gates, Buffet and others choose to give to.

Social justice can’t rely upon the goodwill of others; social justice can’t rest upon individual feelings. Feelings are provincial (we feel for what we know or see or can relate to) and they are unstable (Cooperman may not like Columbia tomorrow). But if universities, for example, are worth having, then society has to support them, not simply individuals.

The shortcoming of relying on charitable giving, not taxes, is evident when it comes to the military. Everyone agrees that it would be absurd for the military to rely upon charitable giving (and bake sales) instead of tax dollars.

What is a fair tax for the super-rich to pay? Let me see. A billion? OK. If I start counting now  . . .

Advertisements

2 thoughts on “What’s a billion or two amongst friends or strangers? the morality of numbers

  1. While I completely agree with you, there seems to be a movement in Congress to reduce funding, rather than maintain or increase it for those groups or services that not only need it the most (e.g., NPR) but also provide invaluable public benefit. Pledge drives are not going to make up the difference.

    The rich, and especially the super rich need to pay their fair share. That’s step one in creating a more level playing field, in my view.

  2. Never mind “Heavily taxed”—if the corporations of the richest were taxed at all, or at the stated rates, that would be a start (as your previous blog about GE pointed out) towards social/economic justice.
    This was a very visually stimulating piece about the problem. Unfortunately, I think many Americans have blinders on when it comes to charity–they see it as solely good, instead of questioning why it is necessary in the first place, and if it helps resolve the issues at hand. Charity oftentimes reinforces power/ economic inequality–whereas more equitable distribution of social wealth would help eliminate this.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s