Dear Rich People …All you wealthy Americans, stop complaining and save the economy!
Posted Saturday, Jan. 19, 2008, at 7:10 AM ETTo: The Filthy Rich
CC: The Stinking Rich; the Pretty-Darned Rich
From: America
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When the Gulfstream lands in St. Bart's, can you have your assistant set up a call? We need to talk.
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
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Remarks from the Fray:
Perhaps you can send a memo to those patriotic companies who have relocated their headquarters offshore in order to avoid paying taxes while seeking government contracts, accepting taxpayer dollars in corporate welfare, and having our government pimp our products overseas and utilize White House/State Department resources to close deals.
Explain to them that if they want to get all the perks of being an American company, they need to stop acting like the only thing they need to care about is their "stockholders" and corporate officers. You know, stop doing stuff like overcharging our government, laying off 5,000 workers in order to "save money" and then giving the departing CEO a $30 million dollar retirement package all within the same year, and, of course, moving offshore to avoid paying taxes on monies made while operating under the flag of our country.
You companies want to be "international" or "multinational" and not accept your responsibilities to the societies in which you reside, fine. But don't expect the gravy train to run without complaints and bitterness from the overstretched taxpayers and mom and pops who have to bear the brunt of the burden placed by you welfare companies.
--jalaroc
(To reply, click here.)
This whole scene shows the "tragic flaw" of the nation-state system: "Nations" have made a virtue of necessity by pretending that "diversity" is an asset, as they grow by conquest and accident. In the meantime, the sort of family spirit of ethnic identity, however flawed, is drained away. We're left with a rational response by the Rich: feather your "own" nest, which means , don't impoverish yourself and your family by making investments in the US, when you could make more money by gaming the system, elsewhere. I can remember when it was considered a disgrace for a "CEO " to lay anyone off; I believe my own grandfather ran afoul of this during the Depression. Bankruptcy was the result.
The fact is, National Sovereignty is a lethal metastable condition in the modern world, so the decline of nation-states is a healthy development. There is simply no way this setup can lead to anywhere but conflict and war, since there is no legal structure to settle disputes.
No matter what the Rich buy, they are not going to be able to save our "Nation".
--disigny
(To reply, click here.)
I don't know about the rest of you guys and gals but I confess to being very rich: I am 81 years old, have an 18-year old son who will be going to college, and I am in very good health. Unless, of course by "rich" you means in terms of money. Alas, no, I drive a 12-year old Toyota and have $11,000 in credit card debts, and I struggle to pay the rent.
No, my richness comes in my attitude that there is no amount of money that (by itself) can equate to a meaningful life, which I define as one in which other people benefit from your being on this planet. So, while I resent the fact that our president gave the uber-rich a two trillion dollar tax cut, I cannot in all honesty complain that their life is necessarily better than mine. After all, one of them reading this may be going through a nasty settlement, or taking chemo, or being investigated for fraud...who knows. Being rich ain't anything, though for a change I might enjoy it...but then again I might not.
--oracle
(To reply, click here.)
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