Over the past week there have been a couple news stories that have struck me because they validate what I perceived to be a change in attitudes ushered in during the 2008 presidential campaign. It seems that the sentiment is shifting reflecting anger toward the rich not just in the US but also around the world. It appears to me the platform of hope and change has misdirected the public’s attention away from where it should be focused on congress and the politicians along with the “banksters” that created the debacle that we are currently dealing with. Just as I suggest in my “Liberty Valance” blog post the truth is being obfuscated and is being allowed to take a turn for the dark side. Instead of focusing on why we have the problems we currently face, the individuals and entities that have their fingerprints all over the economy’s murder weapon are being given a pass. Aside from Madoff (a vile and repugnant individual) and an occasional CEO like Ken Lay there have been few if any perp walks and even less investigation or enforcement of laws violated. Instead addressing economic problems, the current administration promises more of the same by their actions or lack thereof. Rather than tackling the problems and blocking moral hazards both the executive branch and the congress are engaging in class warfare.
Class warfare plays well to John Q, but it is a dangerous and unproductive measure to attempt to pass more big government and spending, under the guise of "leveling the playing field and redistributing wealth”. We are lead to believe that the rich got to the point that they are at because they did things that were unseemly or somehow they gamed or cheated the system. After speaking with and reading many interviews of rich people it becomes plainly obvious that the vast majority became rich because they worked hard at the right thing, they had vision and were driven and most importantly they took a risk. Of course there are some who were just lucky and happened to fall in to a good thing but this is not representative of the majority. It seems that when John Q thinks of the “rich” they have visions of “Thurston Howell III” from the likes of “Gilligan’s Island” or perhaps today “Mr. Pewtersmith” the father of “Lois Griffin” on the irreverent “Family Guy” cartoon. Democrats in Congress and the President feel that a family making $250K is wealthy, maybe if they live in Des Moines, IA where the cost of living is less, but I defy anyone to show you an example of a family on either coast at that income level appearing on “lifestyles of the rich and famous”. H.L. Mencken once quipped, “wealth is any income that is at least one hundred dollars a year more than the income of one's wife's sister's husband.” It seems that much of the public subscribes to Mencken’s remark as anyone who is making more than them is rich. It almost reminds me of the George Carlin bit about driving where he says any one driving slower than him is a moron and anyone going faster is a maniac; in other words rich is in the eye of the beholder.
Of course there are those idle rich who inherited the money and there always has been a jealousy and contempt factor to those who have wealth but are not productive in society. It is true that this class of people has good sums of money and due to their asset mix they tend to pay less tax, but let’s be honest that they are in the minority here.
It seems that the vast majority of people forget that the rich pay the most taxes in the US as a percentage of the population. They forget that the rich tend to have small businesses that create the vast majority of jobs in our economy. They forget that the people that run these businesses many of them took the risk at a some point in their lives to follow a dream and that it all could have gone down the drain if they were not diligent in executing their idea; just look at the statistics that 50% of all new businesses fail with in the first year. Many people seem to be of the attitude that all people who are rich were just born with a silver spoon in their mouth and that is far from the truth. It is the desire and opportunity to be self made and rich that has fueled the dynamic economy and historically unprecedented wealth of the United States. If it were not for these self made rich people John Q would not have the standard of living that he enjoys today. Many of the innovations and products that enhance or make life easier would never have come to fruition if it were not for the economic system the US had in the past. Without the rich there would be no IPODs, Personal Computers, or cars along with countless other opportunities and creature comforts. In order to make things work someone has to take a risk, but if you remove the risk reward incentive what remains? Are people going to take a risk and build or make things that would benefit us all just for the good of his fellow man? Is one going to devote possibly years of work and their own capital without reaping any benefit in return? Sure that will happen when we get to the world of Captain Kirk and Mr. Spock, but we need to focus and ground ourselves in reality.
So why am I bringing this up? I bring this up because I am seeing a slow but inexorable shift indicating that the class warfare mentality is taking root and popping up in many places. The two stories that got me thinking are the attacks on Prince Charles and more locally here in the Boston area there was an incident on Cape Cod. In the footage of Prince Charles’ car being attacked the students protesting their tuition hikes became somewhat violent and one of them is picked up by a microphone screaming "off with their heads”, a familiar cry of the peasants during the French Revolution. The Second incident that has happened over the last couple days took place here in Cape Cod where an arsonist has targeted homes on the Cape and set them ablaze leaving behind a message of “F#@K the rich”. Taken on their face one can easily argue that these are isolated incidents, however, I am of the belief that the class warfare seeds planted have begun to germinate and these are precursors.
I do not advocate living in fear if you have wealth, but I do think it is a good time to look at your situation and consider the idea of scaling back on being ostentatious and securing your assets. Even if the situation never escalates beyond random news items like these it is better to have a plan and make sure that you and those close to you are protected.