Here we go with the waaaaahmbulance over Wall Street bonuses. Poor Wall Streeters. Poor, poor babies. After reading Thomas Frank's newest book, "Pity the Billionaire", let me just answer Megan McArdle's title question from a post on Wednesday. She asks this question: "Are the rich completely undeserving of sympathy?"
Hey Megan, in a word? Yes. They are, and particularly those who made their big fat bonuses by trading bogus securities in a bogus market where the only tangible item was devastating loss to the little guys. You betcha, Megan. But readers, I will put the question to you and let you answer. Here is one of her examples:
And yet, some of the difficulties that people are complaining about are genuinely, well, difficult. Yes, your kids have been absurdly privileged, getting to attend expensive private schools with lots of amenities. On the other hand, all my parent friends seem to think that it's actually really hard on kids to yank them out of school and move them somewhere else, particularly in the middle of a school year. I doubt that it gets any easier because your parents used to be able to afford stratospheric tuition.
Let's not forget that these are kids we're talking about--we shouldn't take joy in uspetting them, even if their parents happen to make a lot more money than we do.
Likewise, when middle class people take out a mortgage that's perfectly affordable on the income they've been enjoying for years, and then lose the house because they suddenly saw that income cut in half, we don't feel a delicious sense of joy because they finally got what was coming to them. We recognize that this it is really terrible to be forced out of a home where you've built loads of happy memories and dreams--and not incidentally, to possibly be forced to yank your kids out of the aforementioned schools.
Why are people supposed to shrug off the exact same thing because they're rich? It's still really awful to lose your house. I hardly think it's whining to worry about this when your income drops and your fixed expenses don't.
Well, how about this for starters? High-end properties foreclose at a far slower rate, giving those rich folks an opportunity to actually catch up on their mortgage or sell their house before the banker comes and boots them out. Generally they get six or so more months than the schmo on the other side of town who finds himself homeless, jobless, and struggling to keep his kids in public school, much less private school.
The Wednesday Millionaire Pity Party all started with this Bloomberg article, which I originally thought was a joke. Actually, it is still sort of a joke, but not in a good way. Some choice quotes:
The smaller bonus checks that hit accounts across the financial-services industry this month are making it difficult to maintain the lifestyles that Wall Street workers expect, according to interviews with bankers and their accountants, therapists, advisers and headhunters.
“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?”
Well hey, I have some experience with this from the time that I lost everything during the Reagan years while I was a single mom. You just go on. The kiddies survive. In fact, in most cases they thrive. It's really ok, rich dudes, if you put your kids in public school. Trust me. They will be just fine and so will you. They might even learn a little empathy for those who have so much less.
Oh, and then there's this poor guy:
Wall Street headhunter Daniel Arbeeny said his “income has gone down tremendously.” On a recent Sunday, he drove to Fairway Market in the Red Hook section of Brooklyn to buy discounted salmon for $5.99 a pound.
I'll bet that cut-rate salmon tastes just as good as the stuff that cost $20 per pound, even without the pedigree.
Executive-search veterans who work with hedge funds and banks make about $500,000 in good years, said Arbeeny, managing principal at New York-based CMF Partners LLC, declining to discuss specifics about his own income. He said he no longer goes on annual ski trips to Whistler (WB), Tahoe or Aspen.
He reads other supermarket circulars to find good prices for his favorite cereal, Wheat Chex.
Day-um. No ski trips? Coupons for Wheat Chex? Someone please, please spare me this. Say it must not be so! Alas, it must.
Here's what I want to tell these guys who are bemoaning the stalled gravy train. For years they made great money, far more than they deserved for doing less than they should have. Unlike the majority in this country who are lucky enough to have a job at all, they made enough to actually save for a rainy day. Why should we pity them if they didn't? After all, they're the financial gurus, the guys in the big office building telling other people how to manage their money, and yet it seems they didn't take their own advice.
So excuse me if I don't shed a tear for their dilemma. Perhaps they'll begin to understand what it feels like to have to cut back until there's nothing left to cut back on in order to make the mortgage payment. While these guys whine about not taking the high-end vacations, other families are struggling to feed their families at all. They'll survive, even if it means selling their expensive cars and taking the train to work. They might even find out they like it. I'm far more worried about the 99 percent than I am these guys.
Pity the millionaires? Nah.