How Rich is Rich Enough?

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.

36 Days in and Obama Hasn’t Delivered

Recently I’ve had several variations of the same conversation with friends of mine.  It goes something like this:

Me: Did you see this thing Obama’s doing.  It’s pretty cool.

Friend: Pssh!  But what about this, that and those.  He’s not living up to his campaign promises!  It’s more of the same!

It seems like there is a pretty strong sentiment out there that Obama has made too many concessions to Republicans and failed to overturn many of the Bush Administrations unpopular policies.  I’ve argued against this sentiment enough times that I feel it’s time to put it up publicly.

First of all, I feel like I understand people’s frustration and disappointment with some of the decisions that have been made lately.  For instance, the Administration has equivocated on closing Gitmo as it promised.  It passed the Stimulus Bill without the more stringent regulations and oversight that we hoped for.  There are a lot of other things that are making people throw their hands up in disbelief.  Why isn’t he cleaning house?  Why isn’t he pushing his agenda through?  Why isn’t he taking a stand on these things?

Barack Obama’s campaign was an inspirational example of how to spread awareness and foster hope in this country’s people.  But in that same breath he set the bar extremely high for himself.  Obama has created such a bright shining vision of the future of government in this country that it’s almost tangible to some people.  He promised us greatness and we want it now.  I say “we” because I’m certainly one of those people.  I’m anticipating these major shifts in our democracy as intently as anyone else.

But maybe I’m just a little more realistic about the time frame.  It has been precisely 36 days since he took office.  In that time, I’ve learned more about the decisions being made in my government than I have in my entire 10 years as an adult of voting age.  And not from 3rd party sources, but from official government sites that want me to know.  A multi-billion dollar stimulus package has been signed and has started being delivered.  It contains the massive tax break that was promised, as well as provisions for creating the much needed jobs that were promised.  And he’s extended health care coverage for our nation’s children.  I call these things pretty impressive for the first month on the job.  Especially compared to what we could expect from the last 8 years.

I do believe we should continue to hold Obama’s feet to the fire.  I think he should be held accountable for the lofty goals he signed up for.  But what I see around me is a continuation of the focus on negativity and nay saying.  The Bush years put us in a really bad mood, and Obama is going to have a hard time dispelling that atmosphere.

So why am I so up beat?  Why am I not gnashing my teeth, shaking my fist and wondering if this is shaping up to be “more of the same.”  The answer is pretty simple and probably sounds pretty naive.  I believe in our president.  I have stated before that I was an Obama supporter mainly because he convinced me that he has integrity.  I think Obama believes in what he says and he genuinely wants to accomplish the things he’s saying.  Combine that with the fact that I think he is extremely smart and capable.  With those things in mind, it’s not difficult to give him the benefit of the doubt.

And the key point I’m trying to make on my side of this argument is that he deserves some slack.  Look what he’s working with:

  • The worst financial crisis since the Great Depression. I don’t think that can be understated.  And it’s made worse by the fact that it’s more closely tied to the global market.  It’s like all of the developed nations in the world are holding giant sinking stones and unfortunately many of the stones are tied to each other.
  • Many adversaries and detractors from the previous administration. The government is still full of people who supported (and still support) George W. Bush’s policies.  If you think these people aren’t making things difficult, you haven’t been paying attention to the way the Bush camp operates.
  • A half-formed team. Obama has had several setbacks in bringing in the people to head up his various initiatives.  Many have been disqualified due to indiscretions in their private affairs (read: tax evasion).  I think the fact that he’s let go of valuable talent to uphold the ideals of transparency and openness is a statement in itself.
  • He’s brand new. This might sound like a cop out.  But he is new on the job.  It was one of the most damning things they brought against him during the campaign and it’s not a completely merit-less argument.  Obama is going to have to figure out how to maneuver before he can make sweeping changes.

Now there is something I don’t understand.  To my friends and anyone else who feels that Obama should be making more sweeping changes and reversals in keeping with his campaign promises: Why are we asking our new President to wield the same unchecked power as our old one? It would be great if Obama could come in and throw his weight around to enact these changes.  But it would only be great because we think he’s right.  When Bush was doing it, we were enraged.  We called it abuse of power.  We called for impeachment and burning at the stake (maybe that last one was just me).  So why would we expect Obama to have the same M.O.?

Obama has always tackled issues with a more measured and intellectual approach.  There are probably lots of things to consider when attempting to right some of the egregious wrongs done by the Bush Administration.  The funny thing here is that I have reversed my position on this since before the election.  I was one of the people going “Just pull all the troops out of Iraq.  How is that difficult?”  or “If we can’t charge the prisoners in Guantanamo Bay, just release them and close the prison.  It’s that simple.”  But I’m sure it’s not simple, and that was a pretty knee-jerk reaction.  The President and his people probably have mountains of information to sift through before they can make an informed decision about the best course of action.  But it’s important to note here that my main reason for changing my thinking is that I trust Obama to make informed decisions.  That’s why I elected him.  Because he promised not to shoot from the hip without knowing exactly what he was getting into.

On another note, It seems to me that one of the campaign promises Obama is trying to keep is to restore the honor to our government and the office of President of the United States.  That can’t be done by steamrolling your policies through while dropping any you don’t particularly agree with.  You do that by being reasonable and compromising and making people feel like they are part of the process.  Sometimes that means making concessions.  We aren’t going to like some of the concessions to be sure.  But the one message Obama has spoken repeatedly over the last several weeks is “it won’t happen overnight.”

Well at 36 days, I’d say we’re still smack in the middle of night.  So I’ll wait until day break and then have a look around.  If I don’t like what I see then, I’ll gnash my teeth and shake my fist with everyone else.