Thoughts on the Mega-Rich and not so Mega-Rich

A friend who is a former co-worker and who now works for PIMCO, sends me Mr. Bill Gross’ Investment Outlook column each month when it is published, for which I am grateful. Gross is not only a brilliant money manager, but a very good and evidently well-read writer. My friend sent me August’s column called, “Enough is Enough” last week. I frequently email him back my fragmented and poorly developed thoughts and we might even have a short e-discussion about it, if he’s in a polite enough mood to hear me out. My email message to him (slightly edited) follows:

I just read this. I’m not sure what to make of this one. Is he serious when he is arguing for higher taxes through the lips of ex-CEO Bob Crandall? Or was he just using that quote to set up a tidy rhetorical finish? If Gross is truly suggesting we ought to raise taxes on the “mega-rich” in order to equalize incomes, I must disagree. Maybe he’s not saying that?

I do agree that these folks he speaks of are greedy and even wasteful with their money, but Gross does not provide the answer to his own question: when is enough, enough? So, I’m led to think that we ought to just bear up and take care of our own and not worry about the “rich.” Besides, it becomes more difficult to make out when I remember that Gross is one among the rich that according to Fitzgerald “are different from you and me.” So whose perspective is he pretending to take?

But then, his article seems to imply near the end that the market itself is taking steps to draw in the excesses. Whatever the case, no matter how absurd the market gets, and it gets pretty absurd, I still say it’s got nothing on the government. Leave them out!

So, why am I posting this here? Well, besides the fact that nobody else is posting, and if they were, nobody else is reading this anyway, FED Chairman Ben Bernanke is a big baseball fan and in recalling this salient fact, Gross’ colleague, Andrew Balls, reminds us in his article for the The Times of London that Bernanke might need to embrace Lefty Gomez’ dictum that “I would rather be lucky than good.” If the “truly rich” were good, would Gross argue that they should undergo greater oppression at the hands of the State? Because of course, many of the folks in our modern economy who we are tempted to suggest are over-compensated for their contributions to society are simply “lucky” as the term is used in today’s parlance, including many of the very art-buying, yacht-selling other-people’s-money mangers that Gross has an eye toward in his article.

Now, Gross is grossly rich himself, and it would be impossible to know his motivation in any case, but I might suggest that much of our hand-wringing over the supposed “mega-rich” who might possibly have more than enough, however that is determined, stems from society’s perception that many of these folks are just lucky, and that’s just not fair. It would at least help to explain why many are so caught up on equality for equality’s sake. And so envy rears its ugly head and we feel as if we must make good on the perceived inequity. If these are rich, it is by happy accident. And since the State does society’s perceiving for it, the specter of increasing already progressive tax rates becomes the second head. The mega-rich don’t see it this way (what of Gross?). They are good at what they do. They have played by the rules, risked other people’s money and created wealth by sheer skill and reason. If they are rich, it is their reward. And so a third head of unthinking arrogance.

Who is guilty of the greater folly here? Who is more to blame for creating the monster? If some say it is luck, others say it is self-determination. The saying goes, “Give a man luck and throw him into the sea,” but of course, we know luck has nothing to do with it. God Himself sent Jonah’s whale, and if some are rich while others less rich or even poor, it is God Who sets them in their place. This doesn’t deny the secondary means which God uses to His purposes. Rather, it illustrates that some men’s greed and other men’s envy are rooted in the same denial of Divine Providence. Men will not believe. And the man who does not must either count his neighbor a fool or a fraud for being poorer or richer than he.