What is it that has the Davos set so freaked out these days? I’m not talking about Wall Street Journal editorials decrying the evils of class warfare. That’s pro forma stuff, not to be taken seriously. I’m talking about the fact that an awful lot of people claim that rich people are really and truly feeling besieged. It’s not an act and it’s not just paranoia—they’re even seeking therapy to deal with it. As Ben White puts it today, “Economists, advisers to the wealthy and the wealthy themselves describe a deep-seated anxiety that the national — and even global — mood is turning against the super-rich in ways that ultimately could prove dangerous and hard to control.”
But why? The rich have done pretty well lately—certainly a helluva lot better than the working class. So what’s the problem? Do they genuinely believe that their wealth might be confiscated in the near future? That’s hard to credit. Eliminating the carried interest loophole or increasing top marginal rates by a few points just doesn’t have that big an effect, and even the most paranoid rich folks can’t believe there’s much more than that on the horizon. So what is it? I don’t know, but I want to toss out a few bullet points just to stir up discussion:
- Over the past few decades, the rich have been accustomed to being lionized: splashed on the covers of magazines as the movers and shakers of the economy and feted in ballrooms for their philanthropy. That’s largely a thing of the past. You don’t have to feel sorry for them to understand that once you get used to something like that, it’s unnerving when it goes away.
- Even worse, the rich have come in for a lot of abuse since the financial crash. Fairly or not, they feel increasingly socially ostracized, and few things promote a feeling of indignation and persecution more than that.
- Most of them have a feeling that they personally have done nothing wrong. Even within the financial industry, 98 percent of the players can argue that the bad actors were limited to the mortgage side and the derivatives brokers. The rest of them have clean hands. They were just playing by the rules, and they happen to have gotten rich fair and square.1
- They have a belief that the protestors against the 1 percent are mostly just unreconstructed lefties who want to demonize the business class and shake them down for a handout. It’s the Sixties all over again.
- They’ve been made to feel guilty for their success. Hell, even the pope is lecturing them. Again, fairly or not, nobody likes feeling guilty. It almost universally provokes defensiveness and defiance against the guilt-mongers.
- Some of them have a genuine belief that the government is trying to intimidate them from speaking out. This is what’s behind their mania for keeping political contributions secret.
I’d emphasize #3 as an underdiscussed factor. It’s not hard to understand, either. I’m not part of the 1 percent, but I’m probably part of the 5 percent, and I’d feel pretty put upon if I spent several years hearing about how terrible I am. After all, I didn’t personally do anything wrong. I just had a lucky life that’s allowed me to live comfortably. What’s wrong with that?
Multiply that by a thousand and this is how a big chunk of the plutocrat set feels these days.
1Yes, this ignores their role in setting those rules in the first place. But most of them never really think about that.