The Power of Billionaires is Wildly Overstated

If you listen to Democratic presidential candidate Bernie Sanders, you might come away with the impression that the greatest threat to our country is not terrorism, nuclear-armed dictators, the size of our national debt, the coronavirus, or even climate change. You’d think it was rich Americans — really rich Americans who Sanders refers to as “da billionaires!”

According to Sanders, the mere reality of billionaires in this country is inherently immoral. He sees them as responsible for all kinds of terrible things, including (but not limited to) people living on the streets, people without health insurance, people struggling with student debt, the oppression of the working class, and — as we’ve heard many times during the debates — a “rigged” political system.

Yes, Sanders likes to accuse billionaires of “buying” elections. He has shamed primary opponents like Pete Buttigieg for accepting political donations from billionaires, and he has shamed primary opponents like Tom Steyer and Michael Bloomberg for being billionaires.

Heck, according to Sanders, billionaires shouldn’t even exist. Their political and societal power is just too much.

But is it?

Sanders made a big deal last month out of Buttigieg’s campaign having 46 contributors who are billionaires. To some people, that may sound like an incriminating number. But even if each of those billionaires had forked over the maximum federal campaign amount to Buttigieg, the total would have come to just over $125,000. That’s a drop in the bucket in the grand scheme of a presidential campaign. And as we all know, Buttigieg is now gone from the race.

And if billionaires can simply buy presidencies, why did Steyer and Bloomberg (the two billionaires in the presidential race) fail so spectacularly? Bloomberg alone reportedly spent over half a billion dollars on his campaign, flooding the national airwaves and Internet with his ads. In the end, he amassed a mere 31 pledged delegates. That translates to about $18 million spent for each delegate.

Not exactly the level of political influence Sanders has been suggesting.

The Democratic socialist from Vermont isn’t alone in overestimating the power of billionaires in our political system. Lots of people, mostly in liberal circles, agree with him. This includes many in mainstream media.

Case in point, the other day on MSNBC, Brian Williams and Mara Gay (of the New York Times) found it astonishing that Bloomberg could have taken the enormous amount of money he spent on his campaign, and instead used it to give each and every American a life-changing one million dollars:

That is rather amazing, when you think about it. And by “rather amazing,” I mean complete and utter nonsense.

Williams and Gay had gotten that “math” from a viral tweet, and the author of that tweet hadn't a clue what she was talking about. In reality, if Bloomberg were to have spread out what he spent on his campaign evenly among the U.S. population, each American would have received a check for a whopping one dollar and fifty-three cents.

The gaffe was rather telling, not just of the laziness of some journalists, but also of many people’s gross misunderstanding of the uber-wealthy’s capacity to pick up the tab for the rest of the country’s expenses. The truth, contrary to the insistence of politicians like Bernie Sanders (and many others, primarily on the left), is that there is no such capacity.

Charles Cooke of National Review wrote on this topic just today:

“It’s why Elizabeth Warren was enthusiastically boosted by the media despite her ridiculous pretense that she could pay for a series of gargantuan initiatives without raising taxes on anyone but the extremely rich. It’s why Democrat after Democrat promises not to raise ‘middle class taxes’ while promising programs that require the raising of middle class taxes. How did this bad tweet make it onto TV to be endorsed? Why did Mara Gay agree with it? Why didn’t Brian Williams notice? Because the people involved in this clip thought it was true. This is how they see the world.

But it’s not true. Not even close.”

This is the fatal flaw behind the “wealth redistribution” argument. Eliminating billionaires, whether it be through a wealth tax or some other form of taxation or regulation, wouldn’t pay for (or even put a dent in) any of these big-ticket government programs. Not single-payer healthcare. Not student loan forgiveness. Not "free" college tuition. Not our federal entitlement programs. None of it.

The same would be true if you added top millionaires to the mix (the top one percent of U.S. income earners already pay for close to 40% of our country's total tax revenue).

As Cooke points out, even if you took the entire net worth of Michael Bloomberg, and divvied it up among every American, we're talking about a one-time amount of just $183 per person. That’s less than most families spend on groceries in a single week. The move would also leave Bloomberg completely and immediately broke, unable to contribute another cent to the government, to business investment, to the consumer economy, to charity, or to anything else.

Now consider that there are only around 620 billionaires in the United States…and that Michael Bloomberg is wealthier than at least 610 of them.

Once you do that math — the real math, not the MSNBC math — the power of “da billionaires” to either oppress or rescue the rest of us doesn’t seem particularly impressive. That’s because it’s not. And those who routinely claim otherwise aren’t any more informed on the topic than Brian Williams and Mara Gay.

But who cares about reality when there's a great political tagline at play. Right?

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