As I have pointed out too many times, in the good old days the focus of personal finance literature was more or less exclusively on how to become rich. For the past few years tips on how not to become poor have been at least as popular. But getting rich is still, and probably always will be, a fundamental goal.
Indeed, it does not take much imagination or rhetorical skill to make a convincing argument that a nearly universal desire to become rich is the driving force behind the economy. As Gordon Gecko tells us, “Greed is good.”
The cynical left-wing view (I am trying to keep from calling it socialist) is that this race to be rich is a fraud. It is the greyhounds chasing the mechanical rabbit. The rich get richer and the poor get poorer, even if the efforts of the would-be rich have productive effects for society as a whole.
And when the liberal elite fails to get much traction from efforts to pit the non-rich against the rich, they often blame the foolishness of ordinary folks for not understanding that they will never be rich. Indeed, the failure of the common man to vote in what the liberal intellectual elite consider to be the common man’s interest is a recurring source of frustration and confusion for the left. (Of course, the fact that so many of the rich do not support the right is not confusing at all. They are enlightened.)
But it turns out that the views of ordinary Americans on being and becoming rich are not nearly as simple or as unrealistic as some might think. Recent polling data from Gallup bears this out.
To begin with, a majority of Americans would like to be rich. 63% of those who did not identify themselves as already rich said that they would like to be. But 35% said that they would not want to be rich. And 1% had no opinion. Huh? One American in three does not want to be rich? Do they not understand how much happier they would be if they had more money?
In fact, they do not. When asked if they thought the rich were happier than they were, only 11% said yes. 57% said they thought the rich were just as happy and 27% thought they were less happy. Combined with the results on the desire to be rich, this is remarkable.
The easy majority of Americans would like to be rich, but the overwhelming majority of those do not think it will make them happier. So why bother? Well, it could be argued that most Americans do not bother. There is, after all, a difference between stating a preference for being rich and doing anything about it.
Last December Gallup asked if Americans believed the country was split between “haves” and “have-nots.” 41% thought so, which is actually down since the beginning of the Great Recession. But they also asked people which group they considered themselves to be in. 58% self-identified as have. And that has been a fairly consistent result over time. Gallup has asked people to classify themselves 8 times in 22 years and gotten between 57% and 67% choosing have.
Most Americans may not consider themselves rich, but they are comfortable. The basic human needs of food, shelter, and medical care are not worries. Ours is a nation of cars, cell phones, flat screen TVs, and individual bedrooms. Becoming richer would be great, but for many it is not exactly urgent.
Moreover, Americans have a fairly realistic view of their likelihood of becoming rich. Although the great majority would like to get there, only 28% thought it was very or somewhat likely to happen. And this was strongly skewed by age, with younger people thinking they had a higher likelihood than oldsters.
All of which contradicts the clichéd explanation of why non-rich Americans are never very enthusiastic about soaking the rich folks. It is not that they expect to be rich someday themselves. Indeed, the age demographics are flipped. Younger Americans, who currently tend to vote for the Blue Team, are more likely to expect to be rich in the future.
I believe that raising taxes on the rich is not particularly popular for two reasons. First, there is the simple question of fairness. Tax rates of 40% or higher do not seem just to most people, no matter how rich the payer is. Second, and I think the left is utterly blind to this, most Americans just do not want the government to get any more money.
[Photo – William Helsen]