Archive for November 17th, 2006

2006.11.17

Wealth Entitlement and Populism

I was delighted to read Jim Webb’s editorial on the pages of Wall Street Journal Editorial Page. I like the Roosevelt-esque populism he espouses.

The most important–and unfortunately the least debated–issue in politics today is our society’s steady drift toward a class-based system, the likes of which we have not seen since the 19th century. America’s top tier has grown infinitely richer and more removed over the past 25 years. It is not unfair to say that they are literally living in a different country.
…
This ever-widening divide is too often ignored or downplayed by its beneficiaries. A sense of entitlement has set in among elites, bordering on hubris.

Essentially the rich feel they are entitled to their wealth. Mr. Webb outlines many of their excuses and rationalities. None of them really hold any water.

The problem is that in the long run these elites are undermining their own stability. Eventually those with less are going to rebel. The article quotes an Economist article (requires registration to read) that warns that there could be serious economic consequences if we do not change direction, including a more protectionist attitude among the population. Warren Buffet wrote a really good and simple explanation of some of the consequenses in the frame of trade imbalances that help a few people get rich now, in the short term, at the expense of most people in the long run.

Of course there are a variety of criticisms of Webbs article, and some of them are even fairly valid. It doesn’t change the fact that the rich are getting richer and the rest of us aren’t really reaping any benefit. Trickle down theory is a failed idea. The rich give themselves jobs they mostly aren’t qualified to hold, give themselves exorbitant salaries and benefits packages, yet seem answerable to no one, not even stockholders. Some of them are honest but on the whole I trust their integrity almost as much as I trust Al-Qaeda to convert to Christian monestaries and promote peace for the rest of their lives. Some of them realize they are a part of society as a whole, but most could care less about the rest of America so long as the money keeps coming.

As more and more people become aware of the Enrons and WorldComs and the Halliburtons and various war profiteers (which I’m sure we’ll see plenty of in the coming years)… As more people see that our trade imbalances threaten to ruin their own prosperity and the prosperity future generations… As more people see more jobs exported to India, China, Mexico, and other cheap labor countries so a few people can make more money off of a bottom line… As more people see the rich getting richer while they can’t afford even basic living… I’m sure the cry for protectionist policies and mandatory equity equalization will be heard across the country from the bulk of the American population.

There are far more people who make less than $100,000 a year than there are making more. I don’t begrudge people making money; I’d love to make more. But I would like to earn my money, instead of having it handed to me on a silver platter with a golden parachute when the shit hits the fan. I’m against protectionism in general, so if we can avoid the problem by fighting it now, even with a populism that seems diametrically opposed to this elitism to eventually find a balanced solution then I’m all for it.

And now it’s late and I’m tired and my train of thought is drifting. End of line.