
I Cried Because I Had No Shoes...
...Until I met a man who had no class.
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A decade ago, as certain politicians were struggling to define what was and was not pornography, they freqently said: "Well, you know it when you see it."
Today, politicians are trying to define who is and who is not wealthy. And while they struggle with the definition, the rest of us are getting an eyeful of, well- Pity Porn.
On February 29th Bloomberg News carried the most recent example of this new genre. An article titled "Wall Street Bonus Withdrawal Means Trading Aspen for Cheap Chex" laid out the miseries of the still-gainfully-employed-but-hell-no-I'm-not-rich investment banking crowd.
Andrew Schiff opens the article bemoaning his $350,000 (not including $60k bonuses) yearly salary. Mr. Schiff is the director of Marketing for Euro Pacific Capital. His lifestyle includes living in a rented duplex in an expensive Brooklyn neighborhood, renting a vacation home for 4 months each summer in Connecticut and sending his two children to a private school with a yearly tuition of $32k- per child. Here are his complaints:
On his home:
“I can’t imagine what I’m going to do,” Schiff said.“I’m crammed into 1,200 square feet. I don’t have a dishwasher. We do all our dishes by hand.”
On his quality of life:
“I feel stuck,” Schiff said. “The New York that I wanted to have is still just beyond my reach.”
And:
“I wouldn’t want to whine,” Schiff said. “All I want is the stuff that I always thought, growing up, that successful parents had.”
But he did whine, and when angry readers sent a barrage of emails telling him what they thought he ought to have, he whined again in an NPR interview two days later:
For one thing, Schiff says he was a bad example to use in the piece because his bonus usually amounts to about one-sixth of his salary, or around $60,000, a far cry from 80 percent many Wall Street workers receive. He says that after taxes, his bonus wouldn't even cover private school tuition for his two kids.
(Try telling that to an American making ends meet on the average national income of $50k per year. Then be grateful that your only contact with such people is via email.)
Schiff explains that if big bonus earners assume those bonuses are going to keep coming, they might buy into a lifestyle that becomes untenable once the bonuses stop.
"They have to make big changes," Schiff says. "That's emotional. It might seem like a high-class, frivolous problem to people with much lower means, but it's going to mean a lot to them."
(Hmm. Mr. Schiff lost a big bonus. Millions of Americans have lost their jobs. I wonder why they're so annoyed by Mr. Schiff? I mean, they have so much in common with him!)
In fairness to Mr. Schiff, he wasn't the only Wall Streeter caught whining by Bloomberg. Here's a selection of some other whinges:
M. Todd Henderson, a University of Chicago law professor who’s teaching a seminar on executive compensation, said the suffering is relative and real. He wrote two years ago that his family was “just getting by” on more than $250,000 a year, setting off what he called a firestorm of criticism.
“Yes, terminal diseases are worse than getting the flu,”he said. “But you suffer when you get the flu.”
Richard Scheiner, a real-estate investor and hedge-fund manager, describes his model of Porsche as “the Volkswagen of supercars.”
And here's my own personal favorite:
“People who don’t have money don’t understand the stress,” said Alan Dlugash, a partner at accounting firm Marks Paneth & Shron LLP in New York who specializes in financial planning for the wealthy. “Could you imagine what it’s like to say I got three kids in private school, I have to think about pulling them out? How do you do that?”
(I'm reminded of something William Styron wrote in his famous novel Sopie's Choice. Sophie, a survivor of Auschwitz now living in Brooklyn, is introduced to a group of wealthy young people who are all undergoing professional psychoanalysis. At the end of an afternoon spent listening to their various neuroses, she remarks bitterly on these young people "picking at their little scabs," and says, "I hate this kind of unearned unhappiness!")
When people criticize comments like those made by Mr. Schiff and Mr. Dlugash, Republicans are quick to label the objections Class Warfare. But there's more to it than that. Beyond the obvious bad taste, these remarks reveal a narcissism and a lack of self-awareness that is troubling for our society as a whole.
Former Goldman Sachs manager Greg Smith remarked on these qualities in a now-notorious Op Ed in the New York Times this week:
These days, the most common question I get from junior analysts about derivatives is, “How much money did we make off the client?” It bothers me every time I hear it, because it is a clear reflection of what they are observing from their leaders about the way they should behave. Now project 10 years into the future: You don’t have to be a rocket scientist to figure out that the junior analyst sitting quietly in the corner of the room hearing about “muppets,” “ripping eyeballs out” and “getting paid” doesn’t exactly turn into a model citizen.
And according to the Bloomberg article, the Bonus Culture can even cause Wall Streeters to hurt themselves:
Richard Scheiner, 58, a real-estate investor and hedge-fund manager, said most people on Wall Street don’t save.
“When their means are cut, they’re stuck,” said Scheiner, whose New York-based hedge fund, Lane Gate Partners LLC, was down about 15 percent last year.
It's a little shocking to imagine that people entrusted with managing millions of client's dollars every year are so badly mismanaging their own. This brings me to the next example of Pity Porn, an article titled "Down and Out on $250,00 a Year" which first appeared the Fiscal Times in December 2010.
"Down and Out on $250,000 a Year" creates a fictional family of 4 and itemizes their expenses in a typical year. It begins with the undeniable fact that $250k goes much farther in some states than it does in others. But it still points out that:
By most measures, a $250,000 household income is substantial. It is six times the national average, and just 2.9 percent of couples earn that much or more.
This admission sets up a premise that is difficult to prove: A family earning 6 times the national average is struggling.
I was fascinated by one of the first arguments made in the piece:
Taxes take a hefty toll. Everything from property taxes and the alternative minimum tax to the taxes tacked on to cell phone bills and the high cost of gas, when combined, takes a massive bite out of earnings – in some cases even more than the federal income tax toll. And it’s not likely to get better anytime soon. States and municipalities have been steadily raising income tax rates to help close gaping holes in their budgets. Property taxes are also increasing, even though real estate values have cratered. And sales taxes are hitting record levels, in some areas nearing 10 percent. Gas taxes, alcohol taxes and hidden surcharges on everything from airline flights, ferry rides, soda, vehicle registrations and rental cars have also been stealthily rising.
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“When most people think about taxes, they think first about federal income taxes, then maybe about sales taxes, but there are a lot of taxes out there,” says Mark Robyn, an economist with the Tax Foundation, a nonprofit tax research group in Washington, D.C. “It’s eye-opening to step back and take a look at the whole picture.”
For nearly 4 years now, the Conservative rallying cry has been, "47% of Americans pay no income tax!" Yet when someone points out that low-income Americans must still struggle to pay all the sales and excise taxes listed above, this fact is dismissed.
Now, in order to prove that a family living on 6 times the average national income is struggling, these extra taxes and fees are suddenly terribly, terribly important.
The Fiscal Time's definition of 'struggling' is quite revealing.
Their fictional family, the Joneses, budgets for the same items we all do: food, housing, transportation. Most people would call these things necessities. But according to the Fiscal Times, there are other necessities for a family like the Joneses:
...Their spending is conservative, based on national averages for professional couples with two kids. Not included are those hefty run-of-the-mill payouts for charitable deductions, life insurance premiums, disability insurance, legal fees – or monthly sessions at the hair colorist, or membership at a gym.
I'm all for contributing to charity, but why are "hefty" contributions considered "run-of-the-mill?" Why would a struggling family feel obliged to make "hefty" contributions?
And legal fees? For what, exactly? This is never made clear. In my own life I've known people earning a wide variety of incomes and none of them has ever named "legal fees" as a common necessary expense.
And as for "monthly sessions at the hair colorist" and "membership at a gym," may I suggest Clairol and jogging around the block?
My point is not that gym memberships and keeping a lawyer on permanent retainer should be forbidden. My point is that such things are not necessities. If they skipped them, perhaps the Joneses would not struggle.
The article lists some other expenses:
Factor in common additional expenses for a working couple with two children – music lessons, day camp costs, and after school sports, entertainment, cleaning services, gifts, and a annual week-long vacation –
And here I must hold up a clenched fist in solidarity, because when I was a girl we had a live-in housekeeper.
We called her "Mom."
This list of luxuries masquerading as necessities bears a strong resemblance to the complaints of the Wall Streeters in the Bloomberg piece. These items only become necessities to those obsessed with obtaining and maintaining a certain place in the socio-economic heirarchy. They are status symbols. To let go of them is to admit that your place in the class structure is slipping.
These articles are describing people who worry about losing face, not going hungry.
Let me close with this story:
A phony beard, a fake tattoo and clothes dragged through grass and stained with coffee were all it took to transform former New Jersey Governor Richard Codey into a homeless man looking for shelter on a frigid night this week.
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Codey said he drifted off for about an hour, his hip sore from sleeping on the uncomfortable floor. In the middle of the night, he struck up a conversation with another man and asked him what he would do when he left the shelter.
"He told me 'I'm really lucky' and explained that he had a bus pass so he could ride and keep warm," Codey said.
The man, better dressed than Codey, said he was out of work and had hoped to stay with a friend but it didn't pan out.
"I'm laying there, thinking about how good my life is and he says he's lucky. Wow. That really puts it in perspective," Codey said.
God Bless us, every one.
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