The Unhappy Rich

Paul Krugman has several posts on the theme of the rich moaning about how hard it is to make ends meet on $250,000+ incomes.

Here is Krugman noting that social mores have changed from restraint on self-indulgence to the uncontrolled moaning about how "tough" life is on the rich:

Even in 1980, there were surely many people at or near the 99th percentile who felt sorry for themselves, at least some of the time. It happens to everyone, after all: I lead a very privileged life (yes, I’m well into the range that will pay higher taxes under the Obama plan), yet even now I find myself experiencing occasional flashes of green-eyed envy. (What? You’re driving me back to the airport in Sao Paulo, in all that traffic? Don’t I rate a helicopter?)

But 30 years ago people with high but not super-high incomes generally felt ashamed of themselves for griping — or at least, felt that they would be ridiculed if they gave voice to their gripes. Today, all restraints are off. The fuss over Messrs. Henderson and Stein is the exception that proves the rule: they wouldn’t be providing this spectacle if they didn’t normally swim in social circles where complaining that you only have 9 or 10 times median family income is considered totally acceptable.

Pretty soon, we’ll be having serious, completely un-self-conscious discussions in major magazines about the servant problem.

Here is Krugman noting Brad DeLong's analysis of the "pain" that a top 1% income earner feels because he can't afford which those richer-than-him are flaunting:

Brad DeLong’s post on Todd Henderson, the already-infamous whining Chicago professor who appears to be near the 99th percentile but feels poor, is worth reading for more than the takedown. Brad isn’t the first to make this point, but his discussion of how rising inequality at the top — a fatter right tail in the income distribution — makes the objectively rich feel poor is exceptionally fine:

Cast yourself back to 1980. In 1980 a household at the bottom of the 1% rich households in America had an income equivalent in today’s dollars $190,000 a year. They know of 1000 people–900 of them poorer than they are in income brackets 90-99% and 100 people richer than they are in the top 1% income bracket. The 900 people poorer than them back in 1980 had incomes from $85,000-$190,000 a year. Those are, if you are sitting at the bottom of the top 1%, the middle class who are not as successful as you. You don’t look downward much. Instead, you look upward. Of the 100 above you, 90 in 1980 had incomes less than three times their incomes. And they would have known of 1 person of that 100 who was seven times as rich as they were.

Thus Professor Henderson in 1980 would have known who the really rich were, and they would on average have had about four times his income–more, considerably more, but not a huge gulf. He would have known people who were truly rich, and he would have seen himself as one of them–or as almost one of them.

Now fast forward to today. Today a household at the bottom of the 1% rich households in America has an income of nearly $400,000 a year–the income of that slot in the labor market has more than doubled, while the incomes of those at the slot at the bottom of the 10% wealthy has grown by only 20% in two decades. The 900 people he knows in the 90%-99% slots have incomes that start at $110,000 a year. Compared to Henderson’s $455,000, they are barely middle class–”How can they afford cell phones?” Henderson sometimes wonders.

But he wonders rarely. He doesn’t say: “Wow! My real income is more than twice the income of somebody in this slot a generation ago! Wow! A generation ago the income of my slot was only twice that of somebody at the bottom of the 10% wealthy, and now it is 3 1/2 times as much!” For he doesn’t look down at the 99% of American households who have less income than he does. And he looks up. And when he looks up today he sees as wide a gap yawning above him as the gap between Dives and Lazarus. Mr. Henderson doesn’t look down.

Instead, Mr. Henderson looks up. Of the 100 people richer than he is, fully ten have more than four times his income. And he knows of one person with 20 times his income. He knows who the really rich are, and they have ten times his income: They have not $450,000 a year. They have $4.5 million a year. And, to him, they are in a different world.

And so he is sad. He and his wife deserve to be successful. And he knows people who are successful. But he is not one of them–widening income inequality over the past generation has excluded him from the rich who truly have money.

What Brad doesn’t say, but is also true, is that the status anxiety created by high inequality means that the rich-but-not-rich-enough often lead worse lives than their somewhat poorer counterparts did a few decades ago: they work longer hours, take fewer vacations, and spend more on things that don’t give them pleasure but that they hope will impress others.

Once upon a time it was a privilege to have citizenship. There were obligations and responsibilities that went with it. And citizenship implied membership in a community. But the rich have opted out. They don't want to be burdened with taxes. They don't want to hear about obligations and responsibilities. They simply want to chant the mantra of "freedom!" and by that imply the freedom-from taxes, freedom from having to deal with the "little people". They want government bought and paid for. They don't want to hear about what living in a civilized society benefits them and what their obligation is back to the society that made all their wealth possible.