Pity The Poor Rich Man

Recently someone posted a fake restaurant check that supposedly exposed the callous greed of a One-Percenter. There was no concrete evidence of such a check in the story so it is no surprise that the story was a fake or a plant. Sometimes a post or article seems too good to be true, too close a fit to one's preconceived beliefs, to perfect an expression of one's philosophy of life. Therefore let us look at what most assuredly must be a tantalizing bit of troll-bait purportedly written and posted by Mrs. Megan McArdle with a healthy scepticism. There is no way this could possibly be real.

Just look at the title!

Are the Rich Completely Undeserving of Sympathy?

Give me a break! After instigating an unbelievable amount of flack for her ceaseless support for the very rich, especially the bankster class that has done so much to destroy our country's economy due to their massive greed and callous disregard for the rest of humanity, we are supposed to believe that McArdle actually wrote an article begging us to weep for the wealthy who are forced to cut back on private school tuition because of the crises they helped create?

I saw a fair amount of chortling this morning about this Bloomberg piece on wealthy financial-industry types who are having to cut back because of plummeting bonuses. And to be sure, some of the cuts are in the "Call me a Waaaah-mbulance" category: can't go to Aspen any more? Had to cut back that three-bedroom summer rental to only one month? Why yes, that is the sound of the world's smallest violin playing a dirge.

See? McArdle doesn't have sympathy for the rapacious rich. She doesn't care if the 1%, who spent so much time telling the poor that they are poor because they are immoral and lazy, are less rich than they used to be. That would be hypocritical and, frankly, stupid.

And yet,

Oh, crap.

some of the difficulties that people are complaining about are genuinely, well, difficult. Yes, your kids have been absurdly privileged, getting to attend expensive private schools with lots of amenities. On the other hand, all my parent friends seem to think that it's actually really hard on kids to yank them out of school and move them somewhere else, particularly in the middle of a school year. I doubt that it gets any easier because your parents used to be able to afford stratospheric tuition.

You thought you pitied the child who was forced to camp in a tent or in cheap motel  until you met a child who could no longer afford Choate.

Let's not forget that these are kids we're talking about--we shouldn't take joy in uspetting them, even if their parents happen to make a lot more money than we do.

Kids who grew up to be Megan McArdle or Ross Douthat or Luke Russe[r]t, the next generation of arrogant, privileged jerks who look down on the poor. Nobody owes them a seat at the head table. They can just muddle along like the rest of us in public schools. At least they are still very comfortable.

Likewise, when middle class people take out a mortgage that's perfectly affordable on the income they've been enjoying for years, and then lose the house because they suddenly saw that income cut in half, we don't feel a delicious sense of joy because they finally got what was coming to them. We recognize that this it is really terrible to be forced out of a home where you've built loads of happy memories and dreams--and not incidentally, to possibly be forced to yank your kids out of the aforementioned schools.

We warned the upper class a long time ago that they were not the true elite, they were vulnerable to the whims of power just like everyone else, and that when the shit hit the fan, they too would suffer. They didn't listen because they were making too much money and were too arrogant to listen to people with less money.

Why are people supposed to shrug off the exact same thing because they're rich? It's still really awful to lose your house. I hardly think it's whining to worry about this when your income drops and your fixed expenses don't.

She's wrong, but she should be used to that by now.

Of course--like many middle class families--wealthy families have taken on many more fixed expenses than they should. In America, at least, we tend to get this stuff backwards.

Yes, the rich are just like middle class families, who are losing their retirement and home and chance to give their kids a college education.

I believe that Elizabeth Warren has made this point--when people get into financial trouble, they often say, "Well, I didn't take fancy vacations or go to restaurants all the time or buy 17 pairs of Jimmy Choos." But (with the exception of some really compulsive spenders) this isn't the stuff that gets people into trouble. It's the big house with the stretch mortgage that you convinced yourself you had to have because it was in a good school district and you needed a yard and a bedroom apiece for the kids. It's that brand new SUV (or Volvo station wagon) you persuaded yourself to buy because it was important to have a safe car. It's the school activities or travel sports teams that cost thousands of dollars, which you let your kids start in ninth grade because you didn't know that you'd have to break their hearts by pulling them out in their junior year. The divorce decree you signed because you didn't realize your income was going to drop by a third.

It takes a person with balls of brass to use The Two Income Trap to support her argument after famously trashing (one of) its author.

Pricey vacations can be cut back. Mortgage payments can't. It's not the luxuries that usually get people into trouble--it's paying too much for "the basics".

And in New York, it's really, really easy to pay too much. One of the guys in the article makes $350,000 and lives in 1200 square feet with three kids. This is the way the lower rungs of the lower middle class lives in the rest of the country. New Yorkers face an overwhelming temptation to push their housing budget to the limit, because what's available on a conservative budget is really inconvenient unless you either make a whole lot of money, or lucked into a great deal in a down market or a transitional neighborhood.

This, from the woman who tells us that she is not here to pay for others' lifestyle choices, and that living in New York is a lifestyle choice. New York real estate prices are why God created New Jersey.

That's not to excuse the folks who spend too much on housing--apartments in vibrant New York neighborhoods are a consumption good, not an entitlement, and people who find the privations unbearable should move to the suburbs. But I certainly understand it--especially because people tend to take cues on what is "safe" or "reasonable" from the behavior of the people around them. Virtually every single person I know in New York spends well over a third of their income on housing. Which is one of the reasons I no longer live in New York.

Another is her lack of success in breaking into the banking industry and the need to move closer to the DC wingnut welfare infrastructure.

I could understand the laughter if the people in the article had been moaning about how terrible and unjust it is to be forced to suffer along on $350,000 a year. But in fact, none of the affluent people he speaks to hold out their experience as somehow equivalent to that of a famine-stricken child in Somalia--"they aren't asking for sympathy", says one source; "I wouldn't want to whine", says another. The closest we get to a "poor little me" is M. Todd Henderson: "Yes, terminal diseases are worse than getting the flu," he said. "But you suffer when you get the flu."

The fact is that no matter how much you make, seeing your income fall below the expenses you've committed to is difficult. Obviously, people whose expenses are closer to the minimum deserve more of our sympathy, and our help. But I'm not sure that this means we're supposed to be happy when it happens to someone richer than we are.

One of the people mentioned in the article McArdle read actually created CDOs. Another spent $17,000 a year on his dogs. Now they are forced to bargain shop for salmon. One poor rich family has to wash their own dishes--or maybe the maid does; these people seem to have a far different idea of poverty than most people.

But on the up side, at least now they have a lower tax bracket and are much less likely to go Galt. No doubt they will be inspired to work even harder, since all rich people became rich through hard work and clean morals. Practicing austerity will make them better people; sacrifice is good for the character. And we have some final advice for the newly less-wealthy: all they have to do is go to school, work hard, put off having kids, get married, and no doubt they'll be back to skiing in Aspen and renting summer cottages in the Hamptons in no time.