Tag Archive: wealth

The Path Toward Reducing Inequality in NJ – Part IV

Part IV of this series of articles provides recommendations on what we can do to reduce income inequality in our state. The goal is to create a more even playing field so that others can share the wealth of our state.

A Guardian article summarizes what economist Thomas Piketty has made apparent in his extraordinary work Capitalism in the 21st Century. “The American dream does not, and maybe cannot, deliver on its promises because economic growth will always be smaller than the profits from any money that is invested. Economic growth is what we all benefit from, but profits from invested money accrue to the rich.” The consequences of this are clear: those who have family fortunes or get super-sized compensation packages will foster inequality while the other 90% struggle to accumulate much smaller wealth.

Paul Krugman comments on Piketty’s work:“Even if the underlying economic conditions point toward extreme inequality, what Piketty calls ‘a drift toward oligarchy’ can be halted and even reversed if the body politic so chooses. So progressive taxation can be a powerful force limiting inequality.

Spoiler Alert: The steps proposed below the fold are incredibly difficult to enact. They will be fought “tooth and nail” by entrenched interests – the wealthy individuals who have the monies to lobby and donate against such proposals. The changes nonetheless should seem detrimental only to the wealthiest 1 to 10%, while benefiting the rest of us. Ultimately the question comes down to: Shouldn’t the 90% have a strong say in the matter? If we don’t insist on balancing the scale there is no hope for reducing inequality.

Not so fast

A foible of our humanity is that we often look at something and see exactly what we want to see instead of what’s there.  I remember a psychological study I was shown in my undergrad years that asked people to look at a photograph of a car wreck and then answer some questions.  If asked if a headlight were broken, 50% of the people said no.  Which means they were probably guessing.  If asked if they noticed that the headlight on the blue car was broken, upwards of 80% would say yes – regardless of whether the blue car had a broken headlight, or even if there was a blue car in the photo.  

This highlights the problem of bias in social sciences.  But it should also serve as a warning for anyone who attempts to use an academic study for political purposes.  If you want the long version of this post, jump over to GSP.  If you just want the short version, click on through to the other side.

Money and Power in Congress

It’s all a tale of money and power. Roll call is out with a new tally of the wealthiest and most senior members of the Congress. Here’s what they had to say about their compilation of data:

The table below lists the minimum value of the assets and liabilities of Members of the House of Representatives as reported on their 2009 financial disclosure forms (covering calendar year 2008). Assets include stocks, bank accounts, rental properties and other income-producing holdings; liabilities are most frequently mortgages and other bank loans. Assets and liabilites are reported in broad ranges; this table uses the minimum of all reported ranges and subtracts liabilities from assets to produce a minimum net worth. See story for details.

Seniority is each Member’s ranking in the House, as reported by the Clerk of the House.

The total wealth of all house members exceeds $1 billion. Our most senior member in the House is actually Congressman Chris Smith who comes in at 24. Congressman Frelinghuysen is our wealthiest official and is actually ranked 14th in the entire Congress at over $18 million net worth. And how does that compare to the rest of the delegation:

Frelinghuysen, who belongs to a political dynasty that dates back more than two centuries, has nine times the minimum net worth of the next richest member from New Jersey, Steve Rothman (D-Englewood).  

Rothman has a minimum net worth of $2.1 million, followed by Bill Pascrell (D-Parterson) with $1.85 million, Leonard Lance (R-Clinton) with $1.59 million, Rush Holt (D-Princeton) with $899,000, John Adler (D-Cherry Hill) with $702,000, Donald Payne (D-Newark) with $346,000, Frank LoBiondo (R-Vineland) at $270,000,  Chris Smith (R-Hamilton) with $113,000, Albio Sires (D-West New York) with $87,000, Frank Pallone (D-Long Branch) with $88,000, Scott Garrett (R-Wantage) with $80,000 and Rob Andrews (D-Haddon Heights) with $31,000.

Here are the complete New Jersey numbers: (The Assets, Liabilities and Minimum Net Worth are in $ thousands )

Last
Seniority
Assets

   

Liabilities

   

Minimum Net Worth

   

Lance 403 1,593 0 1,595
Pallone 51 113 25 88
Holt 191 1,499 600 899
Pascrell 166 1,858 0 1,858
LoBiondo 131 370 100 270
Andrews 65 46 15 31
Payne 57 461 115 346
Rothman 169 2,099 0 2,099
Adler 377 712 10 702
Garrett 259 80 0 80
Smith 24 113 0 113
Sires 319 97 0 97
Frelinghuysen 124 18,153 0 18,153