Tuesday, May 28, 2013

Another journalist finds time from covering real news to feel sorry for the rich

By Marc Jampole
The title of the article is Why the rich don’t feel rich,” but the true subject of the recent piece by U.S. News & World Report’s chief business correspondent Rick Newman is why we should have sympathy for the economic problems facing rich folk.  

Newman finds four reasons why we should “cut some slack to wealthy worriers,” those moneyed folk who still have money worries or feel anxiety over their finances.  But if we examine Newman’s reasons to feel sorry for the worried wealthy we will find that not one of them holds up.

Let’s start with “They take risks,” the first reason Newman gives for treating the money problems of the wealthy with sympathy. Newman is repeating the old saw that the rich deserve what they have because they took the risks. I agree with Newman when he writes, “People who take risks earn higher rewards for good reason,” but why should we then feel sorry for the rich person who has made a lot of money and now has financial anxiety? Financial anxiety comes when you don’t think you’re going to be able to pay your bills. For a rich person to feel financial anxiety, he or she must be overspending. Do rich people have the right to live beyond their means just because they (or someone related to them) took some risk?  Let’s not forget that poor people take risks, too—the risk of taking one job over another, the risk that someone will acquire your employer and fire you, or the safety dangers in many low-paying jobs.

(We have not even considered the question of what constitutes real risk: Connections, family money, the education to see or take advantage of a business opportunity—all these advantages mitigate much if not all of the risk of business ventures as we can see in the histories of such companies as Microsoft, Dell and Tumblr.)

Newman’s second rationale—“they’ve been burned”—is a variation on the first: In Newman’s mythical world of rich people who don’t inherit their money, the wealthy person has stumbled and had set backs before making the big bucks. That “stumbling” is another way to repackage “taking risks,” but with the focus on past risks that failed. My question is the same: Why does the fact that the road to wealth was bumpy make the rich deserve our special sympathy when they have money problems?  It’s as if only the wealthy face career bumps, which we know is untrue.

The last two reasons that Newman gives for sympathizing with the wealthy when they have money troubles are just silly:
  • “The soaring cost of college scares everyone.” Newman essentially believes that we should feel sorry for those people who won’t qualify for financial aid because they have too much money. Newman conveniently discounts the fact that the wealthy family has the opportunity to save more of its money, whereas poor and middle class family have much less disposable income.
  • “Taxes on the rich are probably going higher.” Newman, like all defenders of the privilege and wealth, forgets that for the last 30 years or so taxes on the wealthy have been too low, which has been one of the two major causes of our debt (the other being fighting wars without raising taxes to fund them).

We are prone to offer scorn not sympathy to the poor person, living hand to mouth, who gets into financial trouble at the first major illness or lost job. As a society, we frown upon people taking handouts, even for necessities. We have laws that prevent people from spending their food stamp money on items that society believes is ethically suspect or matters of luxury, not necessity. To receive any kind of medical or other assistance, you have to run a gauntlet of means testing and investigation.  The Republican harsh campaign against the poor in the last election speaks to the belief in extreme self-sufficiency held by one sector of the electorate.

Why then should we proffer sympathy for the rich person who is in an uncertain financial situation? That uncertainty sometimes represents risk, the flip side of which is the wealth the wealthy enjoy. More often though, the cause of the financial anxiety is spending too much—living beyond one’s means.

The mentality that asks us to feel sympathy for the rich who feel money anxiety is exactly the same mentality that bails out bankers but lets mortgage holders rot. The same mentality doesn’t want to expand unemployment because it doesn’t trust workers to look for work if money’s coming in, but sees no need to unduly burden ethical business owners with safety regulations. The underlying belief is that the rich are different—better—and they get to play to a different set of rules.

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