Wednesday, August 17, 2011

Resentment, Inc.

Warren Buffett feels sorry for his secretary. She is paying a higher tax rate on her income than he is paying on his capital gains.

He feels that it’s is unfair. Not sufficiently unfair for him to pony up a little extra to the IRS, but sufficiently unfair to inspire an op-ed column.

Buffett is more concerned with conserving his reputation than his wealth.

His wealth is so vast that he does not, in the final analysis, pay taxes. Whatever the IRS takes from him, he cannot possibly miss it.

It’s the law of infinite numbers. Take away a few numbers from an infinite number and you still have an infinite number.

Buffett can, however, lose his reputation. Not his reputation as an honest man, but his reputation as a political kingmaker.

As a conspicuous supporter of Obama, he does not want to sit back and watch his candidate flounder. So he is throwing Obama a life vest.

Ultimately, Buffett is telling the world that he was not wrong about Obama. The fault for the failure of the Obama fiscal policy lies with those goddamned superrich-- they don’t pay enough taxes.

Barack Obama couldn’t have said it any better himself.

When a businessman starts getting in touch with his inner political flack, don’t take him too seriously.

As many people have noted Buffett does pay a lower rate on his capital gains than his secretary pays on earned income. If he feels so badly about this, he could always pay himself a salary, but he probably does not feel quite that bad.

Buffett believes so strongly in government that he has sheltered the better part of his considerable fortune from taxes by giving it away to charity.

Instead of raising tax rates on the upper middle class why not eliminate the charitable deduction for sums over, let’s say $10,000,000.

Compared to the intemperate ranting of Paul Farrell, Buffett is the voice of cold sobriety.

Writing at MarketWatch, Farrell has gotten himself into a considerable lather over the possibility that if we do not raise taxes on the rich, we will soon be having riots in the streets.

Like in Egypt and Syria and London.

Farrell is quaking in terror over the arrival of the revolution. And it’s all the fault of those Tea Party folk who refused to raise taxes on the rich.

Resentment is building up. More and more people are out of work. Union Square in New York is about to morph into Tahrir Square in Cairo.

If anyone really believes that the situation is Egypt is comparable to the situation in America he needs a few cold compresses to calm his fevered brain.

His analogy is perfectly idiotic.

Everyone knows by now that we have a jobs problem. Too many people have been out of work for far too long, and they are decidedly unhappy about it.

This does not, in and of itself, make them into a mob storming the Bastille. Still, Farrell is afraid. He is very afraid.

He is so afraid that he does not even bother to recommend a real plan for helping the economy to create jobs.

He seems to believe that the solution to the jobs problem is to tax the rich. Of course, increasing the tax rates on the rich is not going to solve the jobs problem.

Farrell does not even pretend that it will. He thinks that it is going to be therapy for everyone’s resentment.

But, Farrell is not arguing the case for increased tax rates. He certainly does not consider that increased tax rates might not produce more revenue.

Since rational argument is not his strong suit, he attempts to threaten, intimidate, and blackmail people into going along with the Obama agenda.

If you don’t raise taxes on the rich, the resentful masses will rise up and burn everything down.

Farrell’s essay is simple-minded to an extreme.

He errs most seriously in assuming that resentment is a staple of American life. It is not.

So much so, that some people are seriously offended a thte lack of popular resentment in America.

Naturally, they are hard at work trying to produce it.

Today Thomas Sowell explains that those who are trying to excuse riots and violence by saying that the people are filled with resentment are really fomenting it.

In his words: “Today's politically correct intelligentsia will tell you that the reason for this alienation and lashing out is that there are great disparities and inequities that need to be addressed.

“But such barbarism was not nearly as widespread two generations ago, in the middle of the 20th century. Were there no disparities or inequities then? Actually there were more.

“What is different today is that there has been -- for decades -- a steady drumbeat of media and political hype about differences in income, education and other outcomes, blaming these differences on oppression against those with fewer achievements or lesser prosperity.

“Moreover, there has been a growing tolerance of lawlessness and a growing intolerance toward the idea that people who are lagging need to take steps to raise themselves up, instead of trying to pull others down.”

But why has resentment not taken hold in America to the same extent that it has in England.

The Economist brings up the old theory that Americans are not resentful because they have: “…income mobility. Joe the Plumber might not be making enough to be affected by proposed hikes in tax rates on those making more than $250,000 a year, they argue, but he hopes some day to be one of them.”

Or else, as Kiri Blakeley explains, in a bit of rhetorical hyperbole, Americans have been fed the illusion that they are all superrich.

In her words: “But will America ever riot over the superrich not being sufficiently taxed? No. Why not? Because Americans are constantly fed the dream that they too will one day be superrich. The theory, drilled into us since infancy, goes like this: Anyone who works hard enough and is smart enough will one day have all of his or her dreams come true. If you don’t—well, it’s no one’s fault but your own.”

She continues: “Americans are too invested in the fantasy that Bill Gates, Jay-Z or Warren Buffett-like riches are going to be theirs someday too. All it takes is a little hard work.”

As though there is something wrong with a little hard work. Or even, a lot of hard work.

I find this argument strange. Most Americans do not aspire to become colossally wealthy. They are smart enough to know that it is impossible for everyone to be that rich.

Most Americans want to succeed. They want to get ahead in the world. They want to achieve something. They want to know that they will have a fair chance at success. And they want to enjoy the fruits of their labor. But they also know that the path to success lies in emulating those who have succeeded, not in resenting them.

Americans are opposed to excessive taxation and they are not too thrilled about giving money to people who have not earned it.

They see an injustice in trying to milk the rich for every last dime because they do not believe, rationally speaking, that more taxes will translate into more jobs.

They also seem to know that an individual who is consumed with resentment will not be able to do his best on the job or in the world.

Resentment is a negative emotion, one that cripples your efforts to focus on your work and to achieve yourself.

Become sufficiently resentful and you will conclude that it doesn’t matter how hard you work. If the game is rigged against you, you can become resentful about it, but the only way to act on that resentment is to destroy what others have earned.

Resentment never solved anything. It does not contribute to economic growth and prosperity.

Resentment is an enemy disguised as a friend. It provides good feelings on the cheap, at someone else’s expense.

The skills you pick up in a flash mob will not stand you in very good stead in the workplace.

I must say that I find it bizarre that Blakeley is taking pot shots at the work ethic.

In England people are rioting because, among other things, many of them do not work, do not know how to work, and do not want to work. Yet, they have been told that they are entitled to live comfortably off the fruits of someone else’s labor.

Sowell explained the point clearly: “A recent study in England found 352,000 households in which nobody had ever worked. Moreover, two-thirds of the adults in those households said that they didn't want to work. As in America, such people feel both "entitled" and aggrieved.

“In both countries, those who have achieved less have been taught by the educational system, by the media and by politicians on the left that they have a grievance against those who have achieved more. As in the United States, they feel a fierce sense of resentment against strangers who have done nothing to them, and lash out violently against those strangers.”

When you fail to work and live a parasitic existence, you are going to feel disconnected from the life of society. You will suffer from feelings of alienation and isolation and unworthiness.

You may not know what the problem is. And you may not want to know. But when the pundits in the media offer to diagnose your condition by calling it resentment, they will be offering you a way to express your own inability to function within society. They will also relieve you of responsibility for your condition.

Teach a man to fish, the old saying goes, and he can feed himself. Teach him resentment and he will blow up someone else's fishing boat... in he name of social justice.


Dennis said...

It is interesting that Buffet pays about 17 percent of his income in taxes which is lower than many of those in the middle class. When Buffet gives a check to the IRS equal to what he says others should pay then I will take him a bit more seriously. If he really believes what he says then he needs to take action to demonstrate his commitment. For someone like Buffet it would be good if he paid 90 percent in taxes. Doesn't he have enough money already according to his hero Obama?
Buffet is trying to use the government to punish his competitors just as WalMart is behind a lot of the push to make "etailers" like Amazon collect taxes. Of course places like WalMart, GE, et al want Obamacare, what better way to drive a lot of competition out of the market. Behind every business that backs Obama is a person who believes he can use the government to hide his lack of management skills. One only has to look at the real record of Imelt.
Most of this is self serving claptrap.

Stuart Schneiderman said...

It's interesting see how many people are calling Buffett out on his absurdities. It seems that the oracle of Omaha has lost quite a lot of his teflon. People are seeing right through the pretense and discovering that it's not about what's good for the country but about what's good for Buffett.

His failure to send a large check to the government makes him sound like a perfect hypocrite.

Wait until someone starts taxing wealth instead of income... let's see what the oracle of Omaha has to say about that.

muebles en salamanca said...

For my part every person must go through this.