One of the most heavily reported economic stories of recent weeks was the widespread anger over bonuses paid to AIG executives. What isn’t making the news, but is probably far more significant, is a different type of anger that I am hearing from friends and clients.
Suppose, like most of my clients, you have worked hard all your life. You educated yourself and found a good job. You showed up daily and did everything you were asked and more. If you went into business, you took risks. You learned to live on less than you made and saved as much as you could.
It wasn’t easy. You went without some of the luxuries that others enjoyed. Instead, you plowed the extra back into your business or put the maximum into your IRA and 401(k) plans every year. You paid your debts and your taxes on time.
For years you have been responsible and “done the right thing.” Today, you are mostly debt free. Your retirement account has grown. You don’t consider yourself rich, but you are doing okay financially.
If this describes you, I have a hunch that you are mad as hell. And it’s no wonder.
Once, your accomplishments would have been honored by all. What you achieved was once a part of the American Dream. This type of lifestyle and behavior was regarded as exemplary.
But you are not feeling respected in that way today. Instead, you are feeling a bit beat up, like the “bad guy” in this economy. Why?
You are starting to get the sense that politicians and the media consider you far richer and more privileged than
you do. Being counted among the “rich,” it is now your “duty” to sacrifice for those who were not as fortunate as you. Unlike you, their misfortune is that they made poor money decisions. They borrowed too much, spent too much, made poor loans, or gambled on very risky investments. Now, you are told it is up to you to rescue them from their plight. You are told some of them are companies “too big to fail.” Others are individuals and companies too desperate to ignore. You must dig deep, do the patriotic thing, and spread your wealth around.
This is not the American Dream you came to believe in, where personal responsibility and freedom were rewarded and poor decisions resulted in equivalent consequences.
Instead, you are being “asked” to sacrifice in two ways. You are being asked to pay a higher percentage of your income in taxes. You are being asked to endure an increase in inflation and price increases that will serve to reduce the future purchasing power of your savings and some investments. Both will reduce the lifestyle you worked hard to provide for yourself and your family.
Because you do have a sufficient income and can live on less than you make, you have the sinking feeling you are becoming a part of the soon-to-be minority of U. S. citizens who actually pay income taxes. It may seem as if taking responsibility for yourself has been an exercise in futility.
In the long term, a few outrageous executive bonuses are a relatively minor issue. What is far more significant is the frustration and anger I am sensing from those who feel they have done everything right, only to find themselves now vilified as “the rich” and expected to solve problems they feel they did nothing to create.
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