Wednesday, September 22, 2010

Observations of and on the rich

"Let me tell you about the very rich. They are different from you and me. They possess and enjoy early, and it does something to them, makes them soft, where we are hard, cynical where we are trustful, in a way that, unless you were born rich, it is very difficult to understand." F. Scott Fitzgerald - "The Rich Boy"

You see, the rich are different from you and me: they have more influence. It’s partly a matter of campaign contributions, but it’s also a matter of social pressure, since politicians spend a lot of time hanging out with the wealthy. So when the rich face the prospect of paying an extra 3 or 4 percent of their income in taxes, politicians feel their pain — feel it much more acutely, it’s clear, than they feel the pain of families who are losing their jobs, their houses, and their hopes. And when the tax fight is over, one way or another, you can be sure that the people currently defending the incomes of the elite will go back to demanding cuts in Social Security and aid to the unemployed. America must make hard choices, they’ll say; we all have to be willing to make sacrifices. But when they say “we,” they mean “you.” Sacrifice is for the little people. Paul Krugman - NYT
David Seaton's News Links
There is a lot of talk about rich people, nowadays. About the sinister Koch brothers financing the "war on climate change science" or about Warren Buffet and Bill Gates promising to donate most of their fortunes to charity, so I have decided to chip in my two cents worth.

Looking back, I've known quite a few rich people over the years. While I've never known anyone as rich as Warren Buffet or Bill Gates, I have known the grandchildren of people who, once upon a time, were as rich as those two are today.

They say that there are two types of people in the world, people who think that there are two types of people in the world and those that don't... I belong to the second grouping.  Having said that, and recognizing that the wealthy come in all shapes and sizes, I'd like to generalize about certain archetypes I've come across.

Lets begin with Buffet and Gates. Both men have worked very hard, obsessively hard, they have been creative and they have made huge, immense, enormous, unthinkable amounts of money... and although both of them are proud of what they have done, they have a certain humility about it all. They know, that no matter how clever and hard working they were, that they were also very lucky, that the rewards are out of proportion to any individual's effort.

The world's first pop star, Bing Crosby, whose version of "White Christmas" is still the biggest hit record of all time, expressed this sort of humility, when he once said, "There is probably a guy singing in saloons in New Orleans that can sing 'Stardust' better than I can, I have been very lucky".

Warren Buffet puts it like this:
“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.”
Bill Gates expresses it more dryly:
"Success is a lousy teacher. It seduces smart people into thinking they can't lose."
On the other hand, I have observed that those who have inherited great wealth, more than feeling lucky, are haunted by their good luck and have a strange, rather patronizing attitude toward effort and merit, which  often combines both mystified awe with irony. Here is a quote of David Koch's from the New Yorker piece that illustrates this mentality perfectly:
"It all started when I was a little boy. One day, my father gave me an apple. I soon sold it for five dollars and bought two apples and sold them for ten. Then I bought four apples and sold them for twenty. Well, this went on day after day, week after week, month after month, year after year, until my father died and left me three hundred million dollars!”
Or George W. Bush at the Al Smith Memorial Dinner in New York, 19th October 2000:
"This is an impressive crowd, the haves and the have-mores. Some people call you the elite. I call you my base."
This is how Buffet dispatches that mentality:
A market economy creates some lopsided payoffs to participants. The right endowment of vocal chords, anatomical structure, physical strength, or mental powers can produce enormous piles of claim checks (stocks, bonds, and other forms of capital) on future national output. Proper selection of ancestors similarly can result in lifetime supplies of such tickets upon birth. If zero real investment returns diverted a bit greater portion of the national output from such stockholders to equally worthy and hardworking citizens lacking jackpot-producing talents, it would seem unlikely to pose such an insult to an equitable world as to risk Divine Intervention.
In other words the Sage of Omaha is willing to pay income taxes and would encourage fellow billionaires to do the same. Buffet could be called the anti-Tea Party.  Bill Gates giving enormous sums to eradicate malaria, which is not much of a problem in Seattle where he lives, could be seen as the anti-Ayn Rand. Both of these men understand, in a practical sense, that humanity finally is a collective effort... We sink or swim together.

Then there is another type, one that has neither inherited great wealth nor managed to make a huge fortune by investing genius or creating the world's most widely used computer operating system. These are people who have more money than the average (or at least they imagine they do) it is true, but they don't feel lucky... they feel that they have worked very, very, hard for every dime they have (perhaps they feel they have worked harder than they actually have) and being better off certainly has not sweetened their natures one bit. To see anyone receiving anything or even enjoying anything they haven't suffered to obtain offends them deeply.

My intuition tells me that this last type is the backbone of the Tea Party movement. These are Murdoch and the  Koch's cannon fodder.

I know a couple with what I think might be a typical Tea Party or "partyesque" profile. He is a well off orthopedic surgeon, his wife is a religious nut, they live in Carmel, California and have their money offshore in a tax haven...

It wasn't always thus... They were childhood sweethearts, they grew up in Memphis, Tennessee, they played together in the streets as children in the same poor neighborhood where Elvis Presley lived before he hit it big. They used to hate Elvis, because, with the money he made off of his first, local, Sun Records hits he bought a big motorcycle and used to ride it up and down the street frightening the children who had no other place to play but the street.

When this couple grew up and got married, the husband joined the Navy in order to study medicine -- obviously his family couldn't afford to send him -- and the two of them spent 20 years traveling around the world:, their eldest children are all "Navy brats".

When he left the Navy he took up private practice and made enough money to put most of it offshore to avoid taxes and live in upscale Carmel... and even invest modest sums in art (my wife's, that's how I know of them). Naturally  between their Tobacco Road, hard shell Baptist childhood and the money he makes as an orthopedic surgeon, they are wildly conservative on social issues... and of course they hate black folks.

I think if you scratch the surface of many Tea Partiers you may find a story like this or people that relate deeply to a story like this.

Perhaps the way the system is set up, they only ones that can save us from the Kochs, the Murdochs, the libertarians and the objectivists, will have to be the Buffets and the Gates... the politicians are certainly too corrupted by the wealthy to ever do it. DS


Anonymous said...

I'm not sure I agree that Gates and Buffett worked "very hard" at anything.


Anonymous said...

David, I agree. I have known each of the types, but it's the petty selfishness that really eats at me. It was on grand display with the so-called health-care reform: so many people so angry about the thought of someone else getting something "for free". That's really at the root of it all ---- it's this attitude of "I had to work for what I've got and you can't have the same unless I'm convinced you worked just as hard. Right under that level is the racism, sexism, homophobia etc.

Harry Haller said...

Here's the thing...

Stephanie said...

There's another group that feels deeply resentful of blue collar workers who make good money and receive good benefits. That these workers often have tedious and demanding jobs tends not to register.