They’re So Greedy that They Don’t Care About a Mere Million Dollars

by Don Boudreaux on June 8, 2014

in Economics

I may have, in the past, written an almost identical post to the one below, but, if so, I can’t find it.  So here goes….

……

A few weeks ago, while driving near my home in the DC suburbs, I was flipping through radio channels.  Because the news was predictably and repetitively full of moronic proclamations by politicians, I settled on being bored with listening for a while to a sports-talk channel.  (I don’t recommend such ‘entertainment,’ I hasten to add.)

When I first tuned in to the “discussion,” the learned sports panelists were debating the appropriate penalty that the National Basketball Association should impose on L.A. Clippers owner Donald Sterling for his racist remarks.  All agreed that the penalty should be astronomically high because (in the words of one of the sports-talkers) “two million dollars means nothing to a billionaire like Sterling.”

I understand this sports-talker’s sentiment: a relatively small penalty likely doesn’t hurt the punishee enough – and $2,000,000, while an enormous amount of money for me and for most other people, is a small fraction of Mr. Sterling’s total wealth.  What does a billionaire such as Sterling care about a measly few million dollars?

Hold that thought.

The very next topic the sports-talkers turned to was the National Football League’s annual draft of college football players.  The sports-talkers unanimously and vigorously agreed with each other that the only reason the N.F.L. owners make such a spectacle of their association’s annual draft is to “squeeze every penny of profit from the fans” (to quote a sports-talker, who meant to be highly critical of N.F.L. owners).

Question: does or does not a few extra bucks matter to rich people?

The general public (as represented here by the sport-radio talking mouths) seems to be of two minds on the matter: when it comes to rich people being penalized for some real or imagined offense, rich people are presumed to be rather indifferent to just a few measly millions of dollars (which is why, it is argued, the financial penalties borne by rich people must be very high indeed).  Yet when it comes to explaining observed commercial practices of rich people, they (the rich people) are presumed to be obsessed with every last cent – so greedy that they are forever eager to work hard and furiously to rake in ever-more dollars into their financial portfolios.

It is difficult, perhaps impossible, to reconcile these two man-in-the-street beliefs about the attitudes of rich people toward money and wealth.  If the first belief is correct, it’s odd that rich moguls would greedily grasp for every last dollar to be squeezed from whatever source it can be squeezed.  Yet if the second belief is correct, it seems that fining even a billionaire a mere million dollars would in fact inflict upon him or her a meaningful penalty.

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