Why People Hate The Rich ... My View

A little background

I was brought up in a middle class family of modest means in a small hilltop town in Sicily. My father had a sixth grade education. His dad emigrated to the U.S. when he was 6 years old. He never saw him again. At age 13 he started his first business to support his mom and younger brother. He just worked, dreamed, and tried numerous ways to improve his station. An avid reader, he was current on many subjects and he was fascinated by the intricacies of real estate law.

My mother came from a better economic station. Her dad passed away three months before her marriage to my dad. Her father put aside the local tradition of not sending female children to school by insisting that she and her older sisters learn how to write and read. As a result, a novelty for their time, my mother and her older sisters were permitted to go to school through the third grade. She was a worker bee. I don’t remember ever hearing her complain or resent our humble circumstances. She was deeply in love with my dad, and my dad with her.

When they both passed away, they had been happily married for 66 years. A novelty, I might add, by today’s standards.

Growing up, I never heard my dad complain about his dad who pretty much abandoned his family, although he would occasionally send them money. He did occasionally lament that he did not have the opportunity to continue his formal studies. He wanted to become a real estate lawyer, a profession he highly admired.

Thanks to his photographic memory, he managed to learn every detail of real estate law, and he spent his final active days working as an assistant to a real estate lawyer (notaio). Notaios in Italy must be degreed lawyers, and go through a three-year specialization course. Notaios are the highest paid profession in Italy earning on average 5 million dollars per year. The number of notaios in Italy is a closed number, therefore positions are often passed from one generation to another, and one has to wait for a notaio to die to aspire to replace him/her.

This lawyer for whom my dad worked told me once that my dad knew more about the law that he did, and that he soon learned to seek his advice during complex real estate deals. It was his way to let me know how smart and hard working my dad was.

Growing up in Sicily right after the war was hard. The country had lost the war and its infrastructure was devastated. The currency was worthless. People had to resort to barter. Most goods were hard to find, and very expensive to purchase. My dad was able to navigate through this period by finding local needs and filling them. He imported and exported goods, he co-founded a power company, and he co-founded a mill to provide flour to the local town.

Dad was strict and demanding. He would not accept excuses or tolerate mediocrity. He rejoiced in others’ success bringing them up to my younger brothers and me as examples of what hard work or an advanced education can do for you. He admired anyone who was able to rise above everybody else through sheer determination and smarts. My two brothers and I have pretty much inherited the same philosophy.

How do people become rich?

The easiest way to become wealthy is to inherit it.  You don’t have to do anything else, just be in the family's line of succession. In the U.S. we have many famous extra-rich people who got their wealth this way: Kennedy, Rockefeller, Mellon, Walton, Koch, Mars, Lauder, Du Pont, Goldman, Hunt, and Gallo to name a few. If you are not wealthy by inheritance, you can become rich by marrying someone who is already rich. These super-wealthy folks often avoid inheritance taxes by setting up perpetual trusts benefitting their progeny thus escaping inheritance taxation.

A more difficult way to get rich is to make it. You start a business, the business thrives, and you get rich. The majority of rich people in America become rich this way. Small businesses and family farms, by and large, comprise this group. You don’t need to be born into family wealth or have advanced education to join this group … just the willingness to take risks, access to start up capital, and a positive market response.

An harder way to get rich is for folks to become a star. They earn it.  They include corporate executives, litigators, medical doctors, movie and television stars, athletes, and Wall Street traders. These individuals earn millions every year. Retired U.S. presidents and first ladies occupy this space as well. It has been said that this group is  the crème de la crème; they are the statistical outliers. As wage earners they are affected by the income tax top rate. Other rich folks pay a much lower rate because dividends and interest are taxed at a much lower rate.

Another way to get rich is to steal. This wealth is ill-gotten, meaning as a result of nefarious and illegal means. It is a small percentage but it shows that greed and malfeasance are at play.  MSNBC devotes several hours per week featuring greedy characters that run amok of the law and wind up in jail after ripping off naïve investors. I submit that this is the smallest group but one that evokes strong reaction by the public. One of the bad habits of this group is that they often engage in lavish life styles that bring unwanted notoriety to them.

The last group falls in the category luck. It is not a big group, but it is larger than the previous group. These folks happen to be at the right place at the right time.  They joined a company whose shares took off on Wall Street. They bought shares in an emerging company in its formative years and suddenly gained popularity and growth. They bougth real estate and the market prices boomed. It was not their genius or their greed that brought financial success, just pure luck.

O.K. why the hate?

Some folks resent that so few have so much. It is unfair! After all we are all created equal as humans. They do not seem to differentiate between different types. They assume that all the rich have gotten rich as a result of unscrupulous behavior at the expense of the poor. They discount or ignore that some people might have had a better idea or that the person worked harder and sacrificed much, or that he was more competent. No! It was all ill-gotten and should be taken away.

Many are motivated by envy. They aspire to become wealthy but wealth has eluded them, therefore they resent that someone else, perhaps not as smart, or as well educated managed to do so. Some intellectual elite fall in this group. They feel entitled to wealth based on their superior education, and have a hard time accepting that Joe Bloe with a high school diploma or less should rise above their financial station. Minorities might bring up white privilege, and forget the fact that skin color, gender, sexual preference, and religion do not count that much. In the five categories discussed earlier, you will find folks from every walk of life. Money has one color, and it is green.

A small number hates the rich out of sheer ignorance. They don’t know the facts but eagerly accept the notion that if you got rich you did so at someone else’s expense. This notion has history behind. It is a fact that during the industrial revolution and for part of the post industrial revolution, it was common for ‘barons” to exploit their workers. That is how some fortunes were built during the 1800’s and 1900’s.  Labor laws enacted since have outlawed many such practices and provided remedies to workers, including collective bargaining.

Folks resent the lavish lifestyle that the rich and famous engage in. The mass media bombards the public with anecdotes of excess and sheer extravaganza. Much damage was done to Romney during the 2012 Presidential Elections when news leaked out that he was building an elevator for his cars in his La Jolla estate. The public finds excesses gross and unworthy of admiration given that there are people around the world who are poor and disadvantaged. Some folks will often quote the Scriptures to confirm that the rich have few, if any, redeeming qualities.

When you combine the five categories, you have a strong cocktail of hate hurled at the rich, typically the top 5% of the population. It does to take long for the posse to form and for mob rule to take over. Sock it to the rich ... Increase their tax rate, impose a heavy death tax, it is only fair that they pay more, and so on. The bandwagon gets many converts ... wealth redistribution after all benefits the other 95%. Never mind that the top 20% pay 80% of the income tax collected by the IRS. 

Summary

Money, it has been said, is the source of all evil. I disagree! Most money is put to good use. America has many foundations started by super-wealthy folks to provide resources for many projects helping those in need domestically and abroad. Many super-rich (top 1/10 of 1%) are donating 75 to 90 percent of their wealth to charities. Investments create jobs, and employ people. 

An interesting factoid of yesteryear: the top 10 rich U.S. Senators got rich by inheritance while the top 10 rich Representatives made theirs. Those who inherited their wealth advocate laws that shift payments from one group to another. Those who made their wealth advocate the opposite intent on sheltering their wealth from the greedy hands of government.

A miniscule number of the rich have gotten there by devious or illegal means. Not every rich person suffers from greed, just a few. 

Rejoice in others’ good fortune. Let it be a source of inspiration if you are so motivated to want to join their ranks.

I am not aware of anyone aspiring to be poor. I know many who aspire to become rich the old fashion way: earn it or get lucky.