An open letter to America's rich people.

Commentary about business and finance.
Jan. 19 2008 7:10 AM

Dear Rich People …

All you wealthy Americans, stop complaining and save the economy!

To: The Filthy Rich
CC: The Stinking Rich; the Pretty-Darned Rich
From: America

Jewelry. Click image to expand.

When the Gulfstream lands in St. Bart's, can you have your assistant set up a call? We need to talk.  

Advertisement

Look, you've had a pretty good deal these past few years. We gave you everything you wanted. Massive reductions in the top income-tax rates? Happy to oblige. Cuts on dividends and capital gains taxes, which overwhelmingly benefit you? No problem. Going after the estate tax—excuse me, the death tax? You got it. We've even agreed to overlook the fact that you private-equity and hedge-fund managers pay only a 15 percent tax rate.

Because we like you, we've pretended not to notice your gauche taste and rude manners. (You know you're benefiting from the greatest concentration of wealth since the 1920s, right? The share of national income taken down by the wealthiest 1 percent rose from 14.6 percent in 2003 to 17.4 percent in 2005, according to Emmanuel Saez of the University of California-Berkeley.) We have sat patiently on JetBlue and Southwest as your private jets clog runways. We continue to bust our butts, defend the borders, and uphold the rule of law in order to protect your fortunes and property.

All we've asked in return is that you do a couple of things you're really good at: Spend and invest that money close to home. Hire us and buy from us. Keep the cash registers ringing, the asset managers managing, and all the service providers providing the many services you so richly deserve.

Most of the time, you've lived up to your end of the bargain recently, buying grotesquely large second homes; splurging on third marriages and fourth cars; throwing expensive, self-aggrandizing parties; and occasionally even funding some medical research. You've also been investing locally, which we appreciate. We're glad that you and your friends have what stock-market types call a "home bias," or overexposure to the domestic market. At the end of 2006, says Jeff Applegate, chief investment officer of Citi Global Wealth Management, American investors had more than 80 percent of their stock portfolios in U.S. equities, even though U.S. stock markets accounted for well under half the global supply.      

But we're worried about you. There are signs that you're getting tired of us, and that you're not living up to your end of the bargain. Sure, Christmas season was tough on everyone, not just Wal-Mart and Target shoppers. But we're a little peeved that you cheaped out on your trophy wives and mistresses during the holiday season. Like its flagship store at the corner of 57th Street and Fifth Avenue in New York, the Valhalla of extreme consumption, Tiffany & Co. was thought to be impregnable to forces of nature. But last week the chain reported that same-store sales slumped in the United States in December. Lexus sales were off 7.2 percent in December from the year before.

Yes, we've heard that the widespread woes of subprime borrowers are now hurting the primest of prime borrowers. (An act of karmic justice, perhaps?) Thousands of investment bankers are losing their jobs, and year-end bonuses for many on Wall Street were disappointing. We feel your pain. But that's no reason to stop spending. Stagnant wages haven't stopped the rest of us from dipping into our nonexistent savings to pay for bigger TVs and smaller cell phones. When we run out of cash, we borrow against our homes. Then we max out the credit cards, and start raiding 401(k)s and penny jars. We regard living beyond our means as a patriotic duty. Maybe you should too!           

The latest investment trends similarly lead me to think you may not be acting in the national interest. America's private-equity firms are plowing cash into India, China, and Latin America, and private bankers are urging clients to drop the home bias. (Don't think condos in Palm Beach and ski chalets in Aspen; think beachfront property in Thailand and ski resorts in the Alps.) A Spectrem Group survey of people with more than $500,000 to invest found that 31 percent are putting more capital to work internationally than in the past. "The rich are investing a larger share of their capital overseas," says Richistan author Robert Frank.

Just when the economy has started to take on water—and we don't know if we've just sprung a leak or we've hit an iceberg—you are racing for the lifeboats. Please, don't abandon us. Ski at Sugarbush instead of Gstaad. Invest in P.F. Chang's China Bistro instead of China. It might not be as rewarding, financially or psychologically. But your country needs you now, more than ever. And after all we've done for you, it's the least you can do.

Love,
America

TODAY IN SLATE

Politics

Don’t Worry, Obama Isn’t Sending U.S. Troops to Fight ISIS

But the next president might. 

The Extraordinary Amicus Brief That Attempts to Explain the Wu-Tang Clan to the Supreme Court Justices

Amazon Is Officially a Gadget Company. Here Are Its Six New Devices.

The Human Need to Find Connections in Everything

It’s the source of creativity and delusions. It can harm us more than it helps us.

How Much Should You Loathe NFL Commissioner Roger Goodell?

Here are the facts.

Altered State

The Plight of the Pre-Legalization Marijuana Offender

What should happen to weed users and dealers busted before the stuff was legal?

Surprise! The Women Hired to Fix the NFL Think the NFL Is Just Great.

You Shouldn’t Spank Anyone but Your Consensual Sex Partner

Moneybox
Sept. 17 2014 5:10 PM The Most Awkward Scenario in Which a Man Can Hold a Door for a Woman
  News & Politics
Altered State
Sept. 17 2014 11:51 PM The Plight of the Pre-Legalization Marijuana Offender What should happen to weed users and dealers busted before the stuff was legal?
  Business
Business Insider
Sept. 17 2014 1:36 PM Nate Silver Versus Princeton Professor: Who Has the Right Models?
  Life
Dear Prudence
Sept. 18 2014 6:00 AM All Shook Up My 11-year-old has been exploring herself with my “back massager.” Should I stop her?
  Double X
The XX Factor
Sept. 17 2014 6:14 PM Today in Gender Gaps: Biking
  Slate Plus
Slate Fare
Sept. 17 2014 9:37 AM Is Slate Too Liberal?  A members-only open thread.
  Arts
Brow Beat
Sept. 17 2014 8:25 PM A New Song and Music Video From Angel Olsen, Indie’s Next Big Thing
  Technology
Future Tense
Sept. 17 2014 9:00 PM Amazon Is Now a Gadget Company
  Health & Science
Medical Examiner
Sept. 17 2014 11:48 PM Spanking Is Great for Sex Which is why it’s grotesque for parenting.
  Sports
Sports Nut
Sept. 17 2014 3:51 PM NFL Jerk Watch: Roger Goodell How much should you loathe the pro football commissioner?