Atlas Shrugged: The Mocking

Tuesday, November 8, 2011

The Deserving Rich


She works much harder than you do.

Before we examine Megan McArdle's post on meritocracy, let us take a moment to marvel at the literary irony. McArdle is living proof that we do not live in a meritocracy; her very presence at what used to be an American literary institution gives lie to her entire premise. McArdle cannot think, read, write or count (a quadruple threat!) yet has reached an extraordinarily high position in the public sphere thanks to her father's money and influence. As McArdle conveniently forgets to mention in her post, she has admitted that money bought her prep school education, her prep school's name bought admission to university, her university's name bought admission to graduate school, and all the above bought contacts who helped her make her way into the upper echelons of the high-paying media. Yet she, like most of those who did not earn their position, writes under the assumption that we do indeed live in a meritocracy and--more important--when that meritocracy fails us, it is just one of those things, those crazy little things that nobody can stop and is nobody's fault.

I don't care about income inequality. I care about the absolute condition of the poor--whether they are hungry, cold, and sick.

That is why she tells us that the poor are too fat and the sick should pay far, far more than they can afford for private insurance.

But I do not care about the gap between their incomes, and those of Warren Buffett and Bill Gates. Nor the ratio of Gates and Buffett's incomes to mine. And I'm not sure why anyone should. Other than pure envy, it's hard to see how I could somehow be made worse off if Bill Gates' income suddenly doubled, but everything else remained the same.

Since everyone's income did not remain the same and in fact incomes dropped, her disregard is proof of callousness, not lack of envy.

But while I do not care about gaps and ratios, I do care about opportunity. It is fine that CEOs earn many times what their workers do--but it is not fine if some are born to be workers, and others to be CEOs. And unfortunately, that increasingly seems to be the story in America, as Scott Winship outlines in a fine new piece for National Review:

There is no such thing as a fine piece for National Review. Although McArdle might be reading the tea leaves and planning for her future, after the Atlantic finds a younger, cuter female blogger.

If you're reading this essay, chances are pretty good that your household income puts you in one of the top two fifths, or that you can expect to be there at age 40. (We're talking about roughly $90,000 for an entire household.) How would you feel about your child's having only a 17 percent chance of achieving the equivalent status as an adult? That's how many kids with parents in the bottom fifth around 1970 made it to the top two-fifths by the early 2000s. In fact, if the last generation is any guide, your child growing up in the top two-fifths today will have a 60 percent chance of being in the top two fifths as an adult. That's the impact of picking the right parents -- increasing the chances of ending up middle- to upper-middle class by a factor of three or four.

That paragraph captures the essence of the problem--and also, why we may well despair of solving it. How would upper-middle-class parents feel about children who had only a 17% chance of achieving a household income above $90,000? They would be horrified. And then they would busily start using the full scope of their talents--their financial resources, their educational skills, and their social capital--to "fix it".

Arguably, this is just what they've done. Rocked by the shattering forces of the Depression and World War II (and flush with the prosperity of the postwar years), the old moneyed elites of the Northeast and Midwest did something really remarkable: they voluntarily abdicated their position. Ivy League colleges threw open their doors to the bourgeois masses, and cut back on the Saint Grottlesex crowd. The old WASP bastions democratized or were swept away by nimbler competitors who didn't scruple to sacrifice profits because it might look bad to the boys in the club. First Jews, Irish, and Italians, and then later blacks, Hispanics, and Asians, burst through doors that had once been reserved for the sort of people who got married and buried at St. Thomas Church.

It's like she never heard of lawsuits that ended racial and religious discrimination.


They were joined by the children of undistinguished WASP families from America's small towns, suburbs, and tenements.

Who could afford to work their way through school, way back when before economic inequality skyrocketed.


The architects of the transition envisioned a shift to a new meritocratic society in which the circumstances of one's birth didn't matter--only hard work and talent. But that hasn't happened. Instead, we have a system that has less mobility than the old, forthrightly aristocratic version.

Research suggests that by the time they were in their 40s, American children born in the 1950s should have experienced the same earnings mobility as their Swedish counterparts if the economic payoff for additional schooling were not so much higher in the United States -- and, more important, if that payoff had not grown so much between generations. And educational mobility in the two countries -- the connection between parent and child schooling -- was actually very similar for this generation. Opportunity for top slots may therefore have been as widespread in the United States as in Sweden.

However, evidence indicates that American children born since the 1950s have had lower educational mobility than children in Sweden and other Western nations. And recent research indicates that the link between parental income and educational advantages on one hand and child academic outcomes on the other is stronger in the United States than in other Western countries.

You can argue about why this is--are the upper middle class transmitting real skills, or pull? But does it matter? As an editor at The Economist once noted to me, it's actually rather more worrying if what they're giving their children is a strong education and an absolutely ferocious work ethic. An aristocracy that simply bequeaths money and social position to its children will eventually fall. And [sic] aristocracy that bequeaths the actual skills required to earn more money than everyone else is self perpetuating.

Here it comes--the "the rich are rich because they work so damn hard" theory. We can actually find pundits who declare that hedge fund managers work more hours than poor people, therefore the poor are lazy and the rich are a meritocracy. Utterly ignored is the fact that often the poor don't have jobs, which really cuts into those hours worked, and that the rich have put many people on part time or contract status to avoid paying them benefits and decent salaries.


And self-legitimating. The old aristocracy was, I think, at least dimly aware that it wasn't quite fair for them to have what they had by mere virtue of being born to the right parents.

But they never tell themselves that, do they? They say that they work harder and studied more and put off having children.

But in the new aristocracy, it is rarely enough to just get born to the right parents; you also have to work very hard.

See?

(Higher earning men are now more likely to work more than 50 hours a week than are men in lower earnings quintiles.) Whatever the systemic injustices, it's also quite clear to everyone . . . even parasitic leeches of investment bankers . . . that their salaries only come as the result of frantic effort.

Remember, according to McArdle there was no fraud in the banking industry,  just systemic failure and bad luck.

The ability of one's parents to confer such enduring advantages is obviously unfair. And while I don't want to say that a society cannot last that way--obviously, many have, for hundreds of years--I don't think it's healthy for society. It is hard to get civic engagement, or respect for the law, when the bottom 40% or so feels that the game is rigged.


It's also worrying because, as Ross Douthat points out in the Times, recently, the meritocracy hasn't done such a great job. Oh, it's easy to cavil--the old moneyed elite didn't do such a great job in the 1920s, now did it? But I think that rather misses the point: shouldn't the educational meritocracy, which really is very different from the combination of WASP elites and up-from-nowhere untutored operators, have done better?
Yes. And they didn't.

Oh, I know--you want to break out your favorite whipping boy. Barney Frank, Milton Friedman, the CEOs of Fannie and Freddie, Ronald Reagan, Alan Greenspan . . . we've rehearsed the list a hundred times over the last few years, and I know you'd be happy to give one more dramatic reading.

Cute--putting Barney Frank and Fannie/Freddie in with the people who cut tax rates and lowered interest rates to the bone.

But as I think Ross is saying, this overlooks a more important question, which is why the system went wrong. Don't tell me it got hostage to the wrong ideology--tell me why all those professors we paid millions of dollars to study economics couldn't provide a convincing rebuttal to that ideology in advance of the crash.

Because telling the rich what they wanted to hear made economists rich?


Don't tell me that regulators were stupid or bankers got greedy until you first explain to me why tens of thousands of very well educated people, most of them graduates of colleges and professional schools that had aggressively winnowed them based on intelligence, barely outperformed a bunch of upstart micks, third-generation coupon-clipping WASP dimwits, and central bankers who still worshipped the barbarous relic of the gold standard?
Because it made them rich?

The new meritocracy doesn't seem to be much better, on any dimension, than the old aristocracy. It's just more persistent, in every sense of the word.
We work harder, so you can't! But it's all good, because this is the best of all possible worlds and we all get what we deserve in life. Which is why Megan McArdle is rich and you aren't.

27 comments:

KWillow said...

...Don't tell me that regulators were stupid or bankers got greedy until you first explain to me why...

Regulators were stupid and dishonest, regulations ignored or done away with, and everyone was greedy.

God damm, that woman is stupid. If the "aristocracy" she's babbling about are as dumb as her, it explains everything -buy she/they'll never "get it".

Clever Pseudonym said...

There are so many things in Megan's clueless post that fill me with rage, I don't even know where to start. Maybe I'll come back to them later when my base reactions are not to litter the comments of this fine blog with four letter words. The opening photo, however, illustrates Megan to a tee. I once saw an interview with Ms. Hilton where she tried to claim she made all her own money, without any help from her family. She must stupidly believe that if she was born Paris Sanchez of 'Coon Cove, Kentucky's second-finest trailer park, to neglegtful, alcoholic parents, she'd still be worth over $200 million because of her stunning abilities to pout, pose, and screw the right people. Like Megan, she truly believes she's where she's at due to merit and hard work. If only the rest of us had the foresight to choose our parents as wisely as these self-made testimonies to the rewards of sweat and toil.

Lurking Canadian said...

I want to back up to the part where income inequality "doesn't matter" just the status of the poorest.

It sure as hell does matter, when the vast sums available to the wealthiest cause things like education, housing and health care to be priced out of the reach of everybody else. Since that is...roughly exactly what has happened in the US over the last 30 years, it seems like something she might want to consider.

Or at least, it's something she'd want to consider if she were not a shill desperately clinging to her illusions in order to protect her self-image.

Anonymous said...

Well, what Megan doesn't get that no one's arguing for a leveling of society. They're just saying that the game got rigged so badly by the undeserving that it's actually bad for society as a whole--Megan included.

A strong middle class is necessary for a healthy society. The game's been rigged here so that the middle class is being destroyed, while others are rewarded far beyond their actual talents.

I mean, the ultimate result of this is likely an American version of a banana republic. And we know how that works out when things get bad enough...

But if that were to happen here, dear old Megan, who's lived in a golden bubble all her life, would still be totally clueless as she was led out to the firing squad...

Ufotofu9 said...

Nice job Susan. She is beyond belief. Hopefully The Atlantic will begin to right the ship and stop their slide and can her. I think she'd like the folks at NRO a lot better.

M. Bouffant said...

(Higher earning men are now more likely to work more than 50 hours a week than are men in lower earnings quintiles.)

This is always a favorite, as if sitting in an office in a chair that costs more than an actual worker's weekly salary while moving one's mouse, pushing buttons & giving orders to flunkies is just the same as manual labor, standing behind a cash register eight hrs. a day, driving a truck 12 hrs. a day or any other obvious comparison.

bulbul said...

LC,

It sure as hell does matter, when the vast sums available to the wealthiest cause things like education, housing and health care to be priced out of the reach of everybody else.
Exactly what I was thinking. I mean, Shiva dammit, this woman pretends to be a motherloving economist and she hasn't figured out this?

Because it made them rich?
This has been episode 4897912352 of "Susan's Simple Answers to Megan's Stupid Questions".
Oh sweet Jesus, is Megan stupid...

Downpuppy said...

The assumption that wealth can be showered on some without affecting others is so blazingly absurd that even Megan should be ashamed to utter it. Executives get rich by taking it from workers and shareholders. Doctors and lawyers get theirs by ramping up fees on clients for plastic surgery & suing their sisters. Virtually nobody gets rich by producing something useful.

And the ultimate result is that with wealth concentrated, the overall situation gets worse - people get deperate, risks get taken, we get 2008 & no recovery.

fish said...

Well, what Megan doesn't get that no one's arguing for a leveling of society.

I would argue for this.

Anonymous said...

i wasn't born on third base, i hit a pre-conception triple.

Anonymous said...

so she's making the same point Douhat was making before (sorry, didn't read the original, just Susan's) -- the real problem is that we have the wrong sort of rich. By opening the top 1% to the masses, we got unprincipled jerks with lots of power. The aristocracy of yore, of course, was made up of noble people, well-bred, good by birthright.

-ecl

Anonymous said...

I've always suspected Megan secretly is ashamed of carrying water for rich people, and that's why she's so thin skinned.

Lurking Canadian said...

I also think she knows, deep down, how utterly unqualified she is for the position she holds. That's why she can never, never admit error and it's also why she uses deliberately obfuscatory language without explaining what it means. She's afraid of being found out for the fraud she is.

Anonymous said...

Let's see what Felix Salmon has to say about the absolute condition of the poor!

http://blogs.reuters.com/felix-salmon/2011/11/08/the-social-safety-net-is-broken/

Anonymous said...

"Oh sweet Jesus, is Megan stupid..."

No she is not. She is morally corrupt.

Anonymous said...

the old moneyed elites of the Northeast and Midwest did something really remarkable: they voluntarily abdicated their position

Uh, uh, uh, uhhhhh... WHAAAAAAT??

I don't know if McArdle is referring to anything remotely real, but if we're talking "rise of the bourgeoisie in America," I believe that history goes:

1. Depression: You don't exist.
2. New Deal: Hey, you exist.
3. Post WWII: The New Deal comes to fruition. MASS AFFLUENCE! (If you're white.)
4. 1950s: The American aristocracy becomes bourgeois.
5. 1980s: America decides it prefers aristocracy.
6. Current: Every aristocracy has a peasantry. THAT'S YOU!!

Anonymous said...

I'm still gobsmacked by the notion that the old moneyed elites of the Northeast and Midwest did something really remarkable: they voluntarily abdicated their position.

And that's where it all went wrong, she thinks, because after that, aristocrats were (gasp) made to work!(!!)!

You can tell McArdle is stupid because she's wrong even in her dreams. But you also have to assume she's evil to have such dreams in the first place.

KWillow said...

I just struggled thru a column (& commets) of M.E. Williams at Salon, saying "One shouldn't judge the Duggars for having 20 children". Stupidest writer (ArgleBargle excepted) out there. Why do popular magazines chose virtually brain-dead people to write their stuff?

Batocchio said...

Claims made in laughably bad faith, poorly argued. That's our McArdle!

atat said...

Salon employs a lot of staggeringly dumb writers. Even their pop culture writers are extraordinarily stupid. Try reading a few Drew Grant pieces sometime. All she has to do is regurgitate celebrity press releases, and she's reliably confused and incoherent nearly every time.

cynic said...

I love that bit about hedge fund guys working so goddamn hard. Shit, I work with them all the time. In the same damn office.

Most of the time they are staring at bloomberg screens and trading their personal portfolios. After the markets close, they are surfing the web or watching TV because they can't go home.

Anybody who walks into a trading floor during march madness will never, ever, claim those guys even work, let alone work hard.

The real work there is done by all the operations and IT folks who slog their asses off so these guys can continue to stare at their bloomberg screens.

Susan of Texas said...

I work 12 hours a day and I don't even have a job.

Ken Houghton said...

McMegan: "I don't care about income inequality. I care about the absolute condition of the poor--whether they are hungry, cold, and sick."

I eagerly await Susan's report of McMegan's complaint about how cutting LIHEAP benefits has left Maine's poorest dependent on Stephen King's largesse as a drop in the bucket attempting to fill a $32.6 million leak.

Taryn Hart said...

How the frak does Bill Gates wealth double and everyone else remain the same? I mean even if Bill Gates had his own printing press, adding that money to the currency base would diminish the value of everyone else's money. But of course he doesn't have a fraking printing press so, doubling his very sizable fortune is going to come from somewhere. So, everything else isn't going to be equal.

Lets try it this way, how would McMegan feel if we just gave everyone in the world as much money as Bill Gates. Why in the world would she care? Well, she'd care because that would mean Bill Gates - and a bunch of other wealthy people - wouldn't be wealthy anymore. Think Megs would be okay with that? I'm thinking not.

The fact is having such unequal distribution of wealth fraks up the economy - it's not a coincidence that Gilded Ages are followed by depressions. So inequality does matter. And her arguments are frankly borderline creepy in their hero worship of the wealthy and clear disdain for the poor.

Cole said...

We all know we've reached that stage in Monopoly where one player ones all the reds, greens, yellows, oranges, both utilities and Park/Boardwalk.

From here on it's a boring game with only one outcome possible, no matter how much the winning player wants to continue it by "floating" loans and shit.

Time to start a new game. The inevitable result of under-regulated capitalism.

Jeff Paul said...

But don't you think that many of the "ninety-nine percent" have developed an entitlement mentality--"I'm poor, you owe me something"? Don't you think most of America blames its problems--whatever they may be--on a faceless "other" that allegedly controls everything? I agree that Megan's views are simplistic, but what about the simplistic, rage-distorted views of people on the other side of the equation?

Susan of Texas said...

No.