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Jewish World Review Sept. 9, 2000/ 8 Elul, 5760

Marianne M. Jennings

Marianne M. Jennings
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Consumer Reports


Why rich folk don't
bother me none


http://www.jewishworldreview.com -- THIS YEAR'S presidential election, in addition to its focus on wet kiss records, appears to be taking on a class warfare theme. If media folklore is correct, nasty rich people are getting away with murder under the tax code and Al Gore will rescue the poor from capital gains oppression once he unloads his $500,000 of Occidental Petroleum stock. George W. , urban legend has it, labors mightily to protect the beluga caviar crowd from taxes upon demise and demise by increased marginal rates.

I have never quite worked up a good passionate disdain for rich folks. My lack of fervor for bad-mouthing the titans of industry and finance and fine diners everywhere stems from studies of non-capitalist systems. Check out Miguel Gonzalez's hovel. Rest areas on our interstates are nicer than the home of one of Cuba's high earners. The per capita income in China won't buy you Saturday night at the movies if you spring for popcorn. The Soviets trained some of the world's finest scientists and raced for space but haven't brought one scientific invention to world markets. There's not even a fruit-flavored cereal out of Minsk.

Russians are bright, capable folks with no incentives. Imagine an economy without stock options. Imagine an economy without white bread. Investment and its returns lose their charms when the government takes it all anyway. Small wonder Vodka remains Russia's one great product.

Rich folks are the risk takers who put themselves, their money and their lives on the line in investments and new businesses. They keep plowing the system for more. I love rich people for that. I love that they have the guts to make a payroll. I love that they seize the next great opportunity. I love that they turn around and give money to charity. Capitalism gives them the incentive and tax codes motivate to do more, more, more.

That more, more, more tempts and irritates liberal ideologues who want to tax, tax, tax to remedy economic injustice. The root of all evil is not money, but envy. Politicians tap into it to whip folks into a class warfare frenzy. Self-interest is not a sin if you understand Adam Smith outcomes. Ronald Reagan's supply side economics and unwavering tax cuts produced this hummer of an economy that has broken down class lines so dramatically that they are as passé as the mood ring and other bourgeoisie junk.

Economic justice is right before our eyes. There has not been a trickle down effect; there has been a redistribution of wealth like no socialist nation has ever seen. The economic quintiles are blending. In 1998, those in the bottom fifth for absolute income (does not include food stamps, government subsidies and is before taxes) dropped to 3.6%. Those whose income grew most: blacks, women and married households. Those in the lowest quintile now enjoy the highest level of income (adjusted for inflation) since the U.S. Census Bureau began keeping the data in 1967. Nearly 100% have a color TV and ¾ own a VCR. Some have nots.

The lines between corporate America, the wealthy and the proletarian masses have never been so blurred. There is a Millionaire Next Door who got there riding on the coat tails of Wall Street giants. In 1983, there were 2.4 million households worth $1 million or more. In 1998, there were 4.8 million such households. Sixty percent of Americans own stock. We have met corporate America and it is us.

Anecdotally, the blurring looks even better. The Hamptons, sporting New York's richest and official cash depository for Clinton campaigns, has a construction boom, driven by the wealthy looking for second homes, with contractors backed up, prices on homes doubled, and construction workers earning $15 - $25 per hour. Miguel Velasquez, a Salvadoran immigrant, sums it all up, "There is just too much work." Mr. Velasquez, who works 12 hours per day, seven days per week, earns $23 per hour. For those of you keeping score, Mr. Velasquez's gross income will approach six figures this year and he continued to turn down work until his sons joined him in business. A generation of immigrants and their children are thriving among the Hamptons' rich.

The Democrats' class warfare theme, complete with the Bill Bradley hunger sob story at their convention, seems contrived. It is. The former senator relayed, courtesy of Senator Paul Wellstone, the story of a Wisconsin child who told a teacher that she had not had breakfast that morning because, "It was not my turn to eat." Contact with Senator Wellstone's office for confirmation brought an acknowledgment that he did not witness the hunger nor could he name said school or teacher.

Cuts in taxes across the board bring the most return from the rich because they put money to work, whether on homes in the Hamptons or in www. coms. In Germany, to jump-start a too-regulated economy, left-leaning chancellor, Gerard Schroeder, cut corporate and the top marginal tax rates. The German stock market is cooking.

I love the rich and all they do. Many of my students surpass my annual income just in stock option bonuses for signing with a company. I love them for that. I love them for taking the plunge into the wondrous world of business. I love that they will grow companies, build houses, hire the Velasquezes, and, at some point, return with generous donations for the alma mater that taught them how to negotiate options and the importance of noblesse oblige. I wish them wealth untold.

Long live the rich.


JWR contributor Marianne M. Jennings is a professor of legal and ethical studies at Arizona State University. Send your comments by clicking here.

Up

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© 2000, Marianne M. Jennings