Good is Good: I Hate Rich People
Thursday, August 25, 2011
In the 1990s I had to endure martini-fueled lunches at the Hope Club on the East Side of Providence when I was the Chief Financial Officer of The Providence Journal Company.
Family shareholders, men who spent their days playing drunken games of backgammon in tweed jackets worn through at the elbows, would ridicule my boss and me for our gross negligence at the helm of their inheritance. When we sold a portion of the company (the cable assets that constituted less than half of the whole) for $1.4 billion, each of these individuals received hundreds of millions. “Phew,” one commented. “I can pay for the milk this month.” The speaker had never worked at the company. In fact, he’d never worked at all. He was delusional and dead serious.
In 2001, just after making a fortune on the Internet bubble, I bought a brand new metallic blue Porsche convertible loaded with every available option. I had to wait for my car to be built according to my specifications. A few days after it was finally delivered and was safely in my garage, I found myself walking down Newbury Street in Boston, a high-end shopping district, and happened to see some other guy driving exactly the same car. “What an asshole,” I caught myself muttering as my instinct was to loathe the driver of such an extravagant vehicle until realizing that if he was an asshole, then I must be one, too.
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GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTI realize that our national religion is that greed is good. But I am not so sure.
Guys keep score based on their financial influence. Owning a team is close to the pinnacle. Being a sports celebrity is pretty good too. As is running a big company. But the best is just pure, raw wealth, generally generated these days through running a successful hedge fund or being a founder of a company that got huge in a hurry. There is most definitely a sense of who has what and who has done what. The men know it, and so do the women, more than a few of whom are with dramatically older husbands who offer little in the way of physique but more than make up for that in power and wealth.
I am just as greedy as the next guy, so it would be highly hypocritical of me to dish out hate without pointing the finger directly at myself. In some sense I have built my own identity, my own ego, around my ability to magically turn straw into gold. I like to play it off—to hide the fact behind nobler ambitions. But put me in the room with the raw meat of a deal at stake and see what happens.
We have a problem when it comes to money and manhood. Why is there so much talk about money among guys? Why is any real discussion about our own complicated relationship to personal wealth and poverty more difficult to get at than our sexual hang-ups?
S&M is kind of cute. Money is not.
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According to the most recent census, 47,000 Americans had a net worth of in excess of $20 million. That’s 0.01% of the population. They controlled 25% of the personal wealth in the country, or $2.6 trillion. According to the same census as of March 2009, 8.1 million U.S. families are living below the poverty line.
Separate from the brutal facts of the growing inequity of wealth distribution is the lack of real upward mobility, which was once the very heart and soul of our country’s mission. And this comes down to educational opportunity. It’s no surprise that Bill Gates and Marc Zuckerberg attended Harvard. All of our recent Presidents and all of our sitting Supreme Court justices went to elite colleges.
And this comes down to educational opportunity.
The most recent study of global education by the Organisation for Economic Co-operation and Development (OECD) was striking, not only because the U.S. fell out of the top 10 in almost every category, but also because of the underlying reason for the fall. “The best school systems were the most equitable—students do well regardless of their socio-economic background. But schools that select students based on ability early show the greatest differences in performance by socio-economic background.”
On this basis, the U.S. did far worse than most of the developing and developed world (See: Waiting for Superman). For a country that prides itself on being able to build a life and a dream from absolutely nothing, the fact is that is near-impossible given our current system of elite private secondary schools and colleges and failing public ones.
Eight years ago, a political scientist named Anthony Marx took over as President of Amherst College, perhaps the most selective of all elite colleges, with the stated agenda of changing the school’s admissions policies to ones based on merit that did not exclude those below the poverty line. In his 2003 inaugural address, he quoted from a speech President John F. Kennedy had given at Amherst—he asked, “What good is a private college unless it is serving a great national purpose?”
Marx recently resigned to run the New York City Public Library system. And while he made progress at Amherst—22% of his students receive Pell Grants, which means they are in the bottom half of the income distribution, up from 13% when he took over—according to Mr. Marx the national problem has only gotten worse. He was quoted in The New York Times at the time of his final commencement address: "We claim to be part of the American dream and of a system based on merit and opportunity and talent,” Mr. Marx said. “Yet if at the top places, two-thirds of the students come from the top quartile and only five percent come from the bottom quartile, then we are actually part of the problem of the growing economic divide rather than part of the solution.
He mentioned a Georgetown University study of the class of 2010 at the country’s 193 most selective colleges. As entering freshmen, only 15 percent of students came from the bottom half of the income distribution. Sixty-seven percent came from the highest-earning fourth of the distribution. These statistics mean that on many campuses affluent students outnumber middle-class students.
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I grew up the son of intellectuals.
My paternal grandparents had some money but that didn’t change my day-to-day existence. If the standard amongst faculty brats in Amherst, Massachusetts was to live in humble-but-new construction homes in a development called Echo Hill, we fell below that standard. We lived in a double house on Main Street that my parents turned into a communal living situation for graduate students.
There just wasn’t any extra money. We drove a Volvo station wagon into the ground and then a white Renault that was purchased used and broke down frequently. I was put on a clothing allowance early on and left to fend for myself. By the time I was in junior high, my dad had been passed over for tenure, and money had gone from tight to a lot tighter.
I was a particularly sensitive kid, large for my age and shy. My brother and sister were not phased by this unique upbringing, but it pained me. I was embarrassed. I became determined to fit in when I became an adult. I would have enough money to live in the equivalent of Echo Hill. Little did I know, I would vastly overshoot my goal.
My parents gave me two very important gifts: a strong intellectual grounding and an example of being utterly fearless in the face of authority (in their case it was demonstrating for Civil Rights and against the Vietnam War). I went to an elite college and university on what I had internalized pretty much through osmosis from my parents, and when the time came to enter the business world—and make true my determination not to be poor—my abilities proved to be perplexingly effective.
Given my family’s background as intellectuals and my own goal to just fit in, my success in generating wealth has left me ambivalent about it. I take seriously the fiduciary duty to my family to continue to make investments that increase rather than diminish the value of our portfolio. I am still just as vicious when real money is at stake in a competitive situation.
But with wealth has come the need to worry about the wealth: the need to fit in with people that I am not sure I fit in with, the need to figure out our obligation to family members who are struggling, the need to face into our responsibility to human beings in general who are struggling, the need to raise kids that aren’t spoiled by privilege.
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Angus Deaton, a professor of economics and international affairs at Princeton University, recently worked with Gallop to poll 450,000 Americans about their state of well-being or happiness. While happiness increases along with annual household incomes up to about $75,000, beyond that, earning more money has no effect on day-to-day contentment, according to the study. These findings were published in the Proceedings of the National Academy of Sciences. Higher incomes did increase the people’s longer-term perception of the direction of their life, however.
This makes sense. As long as food and shelter are at risk, day-to-day happiness is highly correlated with money. But beyond that point, the issue becomes quite a bit more complicated. In addition, the average household income in 2008 was $71,000 (the median was actually $51,000 because of the impact of small numbers of very wealthy families), so doing at least as well as most other people—think my Echo Hill problem—also has an impact.
Above the threshold where money makes the difference between being able to feed, clothe, shelter, and transport your family, the “hedonism” trap comes into play. We work harder to get more stuff to make us feel better about ourselves, only to work even harder to buy even more expensive stuff with the false expectation that money will ultimately buy us happiness, when it cannot, no matter how financially successful we become.
Harvard Professor Tal Ben-Shahar has become famous for his positive psychology and books on happiness. He says:
There is a common misperception concerning the relationship between happiness and success. Much research illustrates that contrary to what most people think, success does not lead to lasting happiness. The opposite, in fact, is the case: happiness leads to success. When we increase our positive experiences, we enjoy a whole range. By raising our levels of well-being we can enjoy more success in our personal lives and in our organizations.
I, personally, am not ready to throw the towel in completely on being rich, but it certainly isn’t enough to create sustained happiness. And it often comes with a heavy cost (see: “Crash & Learn”). To me, the real issue is about meaning. What really means the most in our lives and how does money relate to that?
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When all you do is hang around with rich guys, you end up in a pretty boring bubble. I thought the guy driving the Porsche was an asshole, and that I too must be an asshole, not really because he was driving an expensive car but because that was how I was defining him and myself. I don’t really hate rich guys. I hate guys who are only rich. And it turns out few are, as much as the false bravado of deal jocks like me would sometimes lead you to believe that were the case.
For me, what cuts through the superficiality of money and toys and greed is the connection created from hearing or reading a true story about another man’s life who has struggled with challenges completely different from my own. My motivation in becoming a writer was to seek out and spend time with guys who I thought were cool or inspirational: athletes, soldiers, scientists, musicians, and inmates.
In my interviews with these guys, money—mine or theirs—rarely came up.
What we talked about was far more important. That’s what I think we all collectively, myself included, forget all too often: that real life is way more important than money in and of itself.
But then that’s pretty damned easy for me to say. The wealth gods have been very kind to me. It’s a hell of a lot harder to get philosophical when they are foreclosing on your house.
If money is overrated as a source of happiness for the top half, it is still profoundly important for those with not enough.
And the disparity between the two is widening to the point of collapse. To even the most draconian rich guy, I say the current American way of life is not sustainable if the majority of people have no real chance.
Fixing the education system is easier than hoarding gold, securing a food source, and stashing weapons against a coming class war, about which at least a couple of my craziest wealthy friends are quite serious.
I am not going to pretend any of this is easy even to talk about. It’s hard for me to get much clarity on even my own ambivalence about wealth. But it’s time to break the silence. Until we do, we are all operating under a system that looks more and more like a third-world country where all the money is in a few hands, and those few suffer the delusion that it alone will make them happy.
One could certainly ask the question: isn’t speaking the truth about money not only part of being a happy man, but being a good man too?
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