Since I started it a little over a year ago, this blog has turned into mostly political commentary. This bothered me a little at first, but the truth is it makes the most sense right now. I’ve lived in the Washington D.C. area for 4 1/2 years now, and up until recently, I had managed to steer clear of the political fervor that permeates this place. But if you stay here long enough, I think it’s impossible for the political atmosphere not to make an impression on you. It’s at the forefront of my thoughts now, and since this blog is the place where I put my foremost thoughts… well, there you go.
However I do feel that it’s time to bring the original theme of this blog back into focus. I want to be rich one day, so I’ve been thinking a lot about what that means. More specifically, what does that mean in light of the political and economic turmoil that we’re going through right now?
I’ve been conflicted about what it means to be rich lately. If you asked me “Do you want to be Rich?” I would answer much the same as the author of this blog post did. I just want enough money to not have to worry about it. I think the majority of us just want to feel safe and secure. We want to go have some fun occasionally and not worry about losing our house. But then it struck me that this might be the real problem. This definition is too vague. How much is enough? How rich do you have to be before you don’t worry about it anymore?
I was all on board with the outrage against paying AIG executives bonuses. It’s seems ridiculous. One of the first things a business does when it’s struggling is cut salary bonuses, right? It just makes sense from a purely economic standpoint, right? But like so many other things that have outraged America recently, the facts aren’t as simple as that. Yesterday I read the already infamous resignation letter from a top executive at AIG. And like a lot of people, I felt bad for the guy. If the situation is anything like how Jake DeSantis paints it, all the political wrangling and the public outrage are actually making things worse. We, the public, are on the outside and we don’t really understand the inner workings of Investment Banking. We’re given these shallow, dumbed-down explanations of things because we demand them, and because they make for good news ratings. And then we are given the power to dictate how things should go, based on our limited understanding. And in the process, AIG loses someone like this guy who seemed like he was really trying to help.
But that’s not the point of this story. I want to contrast that story with this one about the top paid Investment Bankers for 2008. Last year, one person made $2 billion dollars for doing the job that is bankrupting America this year. Let’s use the zeros here because it makes things a little more upsetting. That’s $2,000,000,000. That’s bailout money, and it went to one guy. That boggles my mind. Let’s put it on a scale. If you made $100,000 a year, you’d probably be pretty happy right? Well for every $1 you would’ve made last year, this guy made $20,000. Let’s put it another way. The money that one guy made last year could provide a decent middle class income for 50,000 people. At a time when all of the political talk is about job creation, that guy is getting paid the equivalent of 50,000 American jobs.
Some people might say that kind of comparison isn’t fair. But when we’re talking about this kind of wealth gap, fair doesn’t even factor in. So after putting all of this together, I feel a lot less sympathetic toward Mr. DeSantis. He received over $700,000 in bonus money for his work last year. During his time as an investment banker for AIG, he has probably made more money than the average American will see in their entire lifetime. More money than anyone has a right to expect. And he himself even admits that he doesn’t really need it at this point:
I know that because of hard work I have benefited more than most during the economic boom and have saved enough that my family is unlikely to suffer devastating losses during the current bust. Some might argue that members of my profession have been overpaid, and I wouldn’t disagree.
The thing that is most disturbing about this statement is that it makes me jealous. There is no way I could go a year without pay. Even if I did, there is no possible way I could decide to give up that pay when it finally came at the end of the year. No matter how “disappointed and frustrated” I was that my employer didn’t support it.
If you want my 2 cent analysis of this whole bonuses episode, that’s what it boils down to. Ordinary people are really getting a sense for how much these people on Wall Street are making, and it’s infuriating. Because we’re all looking for that kind of security. We get up every day and struggle to figure out how to get there. We work just as hard as Jake DeSantis claims he has, but we aren’t rewarded so handsomely. He is rich by all of the standards that I measure against. Yet he acts indignant because we are asking him not to steal our money in his effort to get richer. We’re still trying to make it. What he has now should be enough.
So after all this, I’m left to consider my own future. What if I succeed in my efforts to get rich? When will it be enough for me? At what point will I be able to stop and say “This is enough, I don’t really need any more.” Especially if it means taking it from others who are still struggling to get there? That’s a tough question. And I think it’s clear that most people on Wall Street aren’t even asking it.