“…. the very rich are different from you and me.”
F Scott Fitzgerald
“… it is not easy for men to rise whose qualities are thwarted by poverty.”
<55 AD-127 AD>
“… the doctrine of enlightened “self-interest rightly understood” was a part of America’s DNA from its founding.”
Reflections on Alexis de Tocqueville
This is kind of about the haves and have-nots … but mostly it is a reflection upon how the wealthy have little, or no, link to the reality of what everyday schmucks like me <non wealthy> think or feel.
The fact that an NBA star spent $75,000 for a ‘5 day get away’ made me sit back and shake my head saying to myself “… and wealthy people wonder why the everyday schmuck like me gets aggravated over the whole wealthy & inequality discussion?”
Set aside any herb Viagra drug discussion or the fact the getaway was at a brothel <both legal> because what a person wants to do in their personal time is their choice <whether I agree with it or not> … this is about $75,000 spent on one long weekend.
I have earned some very nice annual salaries in my past but this is the kind of money I cannot grasp even thinking about past salaries I had.
The most I maybe spent was 10% of this amount on a week long trip to Europe … and I didn’t part with that money casually.
Think about the fact that $75,000 out of pocket is a family of 4 who earns maybe $120,000 annually <taking out taxes & social security & deductions to get back to the $75,000 real cash on hand annually>.
Think about the fact that $75,000 out of pocket maybe allows one of my best friends to partially help pay for his 3 kid’s college degrees.
I think about $75,000 out of pocket to me <and pretty much any of my friends & acquaintances> … well … I cannot fathom how my life would be lived differently if I had it. Suffice it to say … it would be easier and I wouldn’t be plunking it down for one weekend of ‘getting away.’
And, coincidentally with regard to this $75k, according to a study <conducted by psychologist Daniel Kahneman and economist Angus Deaton> on Americans and how they evaluate their happiness, a salary of $75,000 a year is the magic number after which people’s day-to-day happiness no longer improves. According to their numbers, you won’t be any happier on a day-to-day basis if you’re making $75,000 or $750,000—though you’ll likely feel like you’ve got a better life overall.
With all due respect to someone who almost died … this jerk spent $75,000 on a 5 day getaway.
To circle back to Alexis de Tocqueville … self interest rightly understood this is not.
I do not begrudge people earning money.
I do not begrudge wealth.
I do not begrudge vacations and ‘needing to get away.’
On the other side of this discussion … nor do I believe an ‘entitled mentality’ benefits any culture … let alone benefits the self-esteem & self-actualization of individuals. Working for something and getting it, or being fairly rewarded, creates better people psychologically.
But what I do know is that a culture with a healthy fairly distributed structure of wealth distribution <low to high> creates a healthy economy and mindset. Research has shown again and again a natural distribution of wealth encourages people to work hard and achieve fair compensation for their efforts <and permits people to dream and also establish what they want in their minds as well as find some level of what they feel comfortable with>.
But I also know that research consistently shows that when wealth inequality reaches absurd scale it is detrimental to attitudes & behaviors <which inhibit economic growth and foster bad attitudes>.
$75,000 on one weekend.
I do want to bitch about the really rich today and wealth inequality.
But I’m not going to bludgeon people with statistics because I am fairly sure most of us have the gist of the issue.
I will point out two key wealth inequality thoughts:
– The growing gap between the poor and rich is a global phenomenon. According to Oxfam, the richest 1% have seen their share of global wealth increase from 44% in 2009 to 48% in 2014 and are on track to own more than the other 99% by 2016.
– In US, over the last three decades, the wealth owned by the top 0.1% households increased from 7% to 22% even as the wealth of the bottom 90% of households declined.
And I will also point out that even though I earned a good salary in the past <nowhere near some of these high numbers> I struggle to believe I can put myself into the shoes, let alone the minds, of the super wealthy. Shit. I am fairly sure 99.9% of us cannot.
I said that as a preface to me saying that I recognize that wealth or not … they have their issues & problems too.
I was reminded of this when I saw that some NYC therapist discussed the problems he discusses with his super rich clientele:
“If you are part of the 1%, you still have problems and they are legitimate to you. Even when you say: ‘I don’t have to struggle for money’, there are other parts of your life.
Money is not the only thing that defines you. Your problems are legitimate.”
Clay Cockrell therapist to the 1%
Here is the thing.
Although the 1% of the 1% have problems … they still have choices because of their wealth.
The 99.9% have no such choice … they just have to get on with getting on with it.
This makes me suggest that it’s not really the wealth that bothers me … it’s the way that money is spent.
And also maybe the fact that systems, and a world, originally conceived to serve everyone and give everyone a fair chance … can be ‘bought into’, redesigned and develop its own set of rules to favor not only the needs of the wealthy … and, maybe the worst, is being reconstructed for the protection of wealth and the wealthy.
My luck was accentuated by my living in a market system that sometimes produces distorted results, though overall it serves our country well. I’ve worked in an economy that rewards someone who saves the lives of others on a battlefield with a medal, rewards a great teacher with thank-you notes from parents, but rewards those who can detect the mispricing of securities with sums reaching into the billions.
In short, fate’s distribution of long straws is wildly capricious.
Simplistically … more wealth begets more wealth.
In it’s most sneaky way it does it in a way I call the double down of being wealthy.
What I mean is that the more money you have the more additional free shit you get <and, worse, wealthy people feel they are entitled to these things … uhm … yeah … I called it ‘entitlement’>.
Poor people … shit … everyday people … would be shocked if they knew all the perks rich people get simply for being rich.
Forget the tax breaks and loopholes a wealthy person has access to maintain their wealth.
Rich people often get paid to wear jewelry.
They get paid to lose weight.
They’re given free laptops and TVs.
They get ‘comped’ rooms or upgrades that eliminate expenses.
They get expense report reimbursements.
The most ludicrous is when the celebrity wealthy get gift bags just for attending big award shows, bags filled with “goodies” worth $20,000 — which is more than a full-time minimum wage worker earns in a year.
Inequality has an even uglier side.
It’s pretty obvious to state that having more money affords you more food, more clothes, more housing, and more “stuff.”
But the richest families actually spend less on food, clothes, housing, and cars than the poorest families as a share of their income. The real difference between the rich and the poor is that the rich spend a larger share of their much larger income on insurance, education, and, when you analyze the housing component, mortgages—all of which are directly related to building wealth and preserving wealth.
The richest 10% spend much less of their income on food.
The richest 10% spend much more of their income on insurance <and relatively more than all but the very poorest on education>.
This means that when you have money you actually spend less on the stuff that ensures you survive and more on the stuff that ensures that you <and your children, possessions, and wealth> survive and thrive.
Poverty … shit … even income-stressed … means no future … only a Life lived in the present tense.
While we, who have money, can suggest those with less money should work harder, be smarter and look to the future … reality dictates that the anxiety of having no money all the time forces poorer families to keep focused on immediate needs & concerns.
The poor spend relatively more on what will keep them alive.
The wealthy spend more on what will keep them rich.
This leads me to address the “big” issue.
Or what some people call “redistribution” <which I do not>.
It is admittedly a tricky discussion.
It can quickly devolve into a socialist type discussion. But it is not.
It is as simple, and complex, as fairness. And I mean fairness not in wealth distribution but rather social mobility.
Since 1980 America has been experiencing a significant increase in income inequality. In 1980 the top 5% represented 16.5% of total national income and the bottom 40percent represented 14.4percent. By 2008 the 16.5 was 21.5 and the 14.4 dropped to 12%.
Suffice it to say the distribution worsens when you look at wealth rather than income.
Attach that to the fact that the United States ranks worst among major economies in social <upward> mobility. Yup. America now lags behind many European countries in the rate of upward mobility <so much for the “land of opportunity” concept>.
Basically the lower end of the middle class truly is getting, and had gotten, royally screwed.
Those with just a high-school degree or less have seen their relative earnings sink.
And over the past decade those who attended college but did not earn a degree have also seen their earnings sink.
Incomes at the top, meanwhile, rose significantly during the whole period.
The result was a dramatic divergence in fortunes.
Please note … this is about capitalism … and it isn’t.
Increasing income inequality is certainly a reflection of a broader transformation in how capitalism is transforming itself in the 21st century.
While capitalism has certainly offered tremendous benefits – it has helped increased standard of living as well as lift hundreds of millions of people out of poverty in the emerging markets and provided cheaper, and new, goods and services to everyone – it has also hollowed out the incomes and wealth of the American lower-to-mid middle class.
All the while the rich at the very top got richer.
Here is my main factoid.
The inequality can mainly be reflected in the fact that only 40% of American neighborhoods now have an average income within 20% of the national median … compared with 60% in the 1970s.
There are consequences on society <beyond just making people angry>.
Now … one could start asking me what is creating this deep lack of social mobility.
Think of something called ‘opportunity hoarding.’
Some guy named Matthew O’Brien wrote about “opportunity hoarding,” the idea that rich people are talented at doing all the right things you need to stay rich and make sure your kids get rich, too. Rich couples live in richer districts, read more to their kids, send them to better schools, hook them up with better internships, slide them into better entry-level jobs (or, better yet, into the family business), and finally pass down their insured and well invested wealth. Even education, the great American equalizer, makes for a poor equalizer. And it’s not only because wealthy teenagers are more likely to go to school. Young people born to rich families who don’t go to college are 2.5 times more likely to end up in the richest quartile than young people born to poor families who do go college.
But the real point with opportunity hoarding is that the wealthy, looking at the widening gap between the haves & the have nots, are more inclined to do whatever it takes to protect themselves from falling INTO that gap.
They hoard their opportunities as well as their wealth, therefore, others cannot shift into the space because it is blocked out.
The reality is that the market isn’t so good at making sure that the wealth that’s produced is being distributed fairly or wisely. Some of that wealth has to be reinvested back into education, so that the next generation has a fair chance, and reinvested into our infrastructure <which makes the economy efficient>, and provide some sort of safety net for those who lose out in a market economy.
I didn’t want to rant about inequality … I wanted to rant about the absurd view the wealthy seem to have with regard to the world.
The super-rich have some absurdly distorted ideas about the world. They are, on more than average, to believe their achievements are the product of their superior brains and hard work.
When you end up talking about inequality and haves and have nots it becomes a convoluted passionate discussion.
The divide between the haves and the have-nots is nothing new in America, but in recent decades that gap has been getting wider as the middle class shrinks and the very richest Americans keep getting richer.
Inequality and ‘economic growth’ are inextricably tied … but maybe in the wrong way.
We’ve all been effectively told, and sold, that endless growth is essential to maintain and improve our quality of life.
This is not only absurd it also couldn’t be further from the truth.
We seem to forget that after World War 2 worldwide competition was relatively nonexistent therefore US companies could afford to pay average workers – with average skills – above-average wages, complete with pensions.
In addition the GI Bill got “single-family home ownership” started for the everyday working people. Before WWII single-family home ownership was not something the average common person strived for let alone even thought was possible.
These two factors created the largest middle class ever created. Affordable, one-family homes were built everywhere and millions of people all of a sudden had “good jobs” and were able to afford these houses being built.
Average people working on assembly lines, doing fairly simple work, were making house buying money.
And then the natural evolution of ‘if I have this I should be working toward this’ attitude kicked in <psychologically called ‘hedonistic adaptation’>.
Not only did we get used to owning a home we got used to a higher standard of living and we got used to ‘moving up the economic ladder.’
We were NOT used to finding comfort and staying at that comfort level.
We have come to accept moving up should be the one constant in our lives.
THIS is what we are always looking to go back to.
Just think about that for a second.
The average blue collar worker … the one with a high school diploma putting a nut on a bolt all day making enough to buy a house, two cars, yearly vacation, and dinner out every week … is that possible in today’s world? Is that even realistic?
We can talk about CEO pay, the 1%, and corporations all we want but maybe a part of it is that the good old days of average people living above-average lives are over.
I say that but I also want to remind everyone about some of these average everyday people.
And we seem to forget as we look at the $75000 weekenders that the billion dollar profits that McDonald’s make are mostly created by the ‘burger flippers’ and NOT the shareholder. Yup. The real wealth creators are the ones who work long grinding hours <these are the people who are also living in the ‘present tense’ with regard to money>.
We sometimes seem to forget that even if everybody had a PhD we still need garbage men, plumbers and sewer workers. All of whom most certainly contribute more to society than say wall street speculators who make money off of making money <not making anything or doing anything>.
We seem to forget as we bitch & moan about subsidizing low-paid workers with food stamps and other ‘entitlement’ initiatives that our anger is directed at those who actually work 10 hours 6 days a week trying to make ends meet and sustain a family … rather than the companies and wall street groups that rake in billions of dollars.
We seem to forget about those things so well that we then decide to focus on people who do have wealth and go out of our way to protect it for them <because they earned it>.
I read somewhere that the True Measure of Any Society can be found in how it treats its most vulnerable members.
And when I think about that I start thinking about the utterly despicable, self-absorbed actions of those who spend $75,000 on a long weekend.
I want a world of the future which will value real skills … and real morality.
In the end.
While there is certainly a higher moral road … the basic road business walks is ‘produce something and make money from it’ and that is the same basic road for a healthy society.
Wall Street makes wealth from wealth.
The everyday schmuck makes wealth from doing something.
That has to count for something … doesn’t it?
Only a sense of shared social sacrifice in the pursuit of ‘what makes this country great’ will generate the progress we need and desire.
When I see a headline that someone paid $75,000 for a long weekend <as I stare at my $136 electricity bill> I recognize today’s world is relentlessly driven and categorized by money. I know it shouldn’t be but I would have to be delusional to not recognize this.
We live n a world where if you do not earn and spend conspicuously you are failing.
We use material things as a substitute for feelings and hopes <why else would you go to a brothel for $75,000 or have a $25 million mansion for just you and your spouse>.
Our culture seemingly has a price tag for every dream.
I can feel compassion for the super-rich. They got problems too.
But if I got 99 problems I can guarantee you the 1 thing that would help resolve most of them would be $75,000 <and most of hte 99.9% would be raising their hand saying ‘hallelujah’ right with me> .
So please forgive me if I feel slightly less than compassionate when I see wealthy people spending $75,000 for one weekend of fun to ‘get away.’
“Self interest rightly understood.” $75,000 for a long weekend <at a brothel>.
Someone somewhere has lost sight of what is reality.