Bill Totten's Weblog

Tuesday, September 25, 2007

Broken Social Feedback

The Wealth Gap is an Experience Gap

by Jonathan Rowe (September 10 2007)

Money is a psychological phenomenon. It has no reality in and of itself. Take a dollar bill to the US Treasury and demand payment for the "debt" it represents. In effect they will hold a mirror to your face. You want payment from us? All that's in that piece of paper is you - your faith, your trust, your desire to have more of those dollars, yours and everyone else's. It is little wonder that money becomes a projection screen for so much that rattles around in our psyches; and nowhere more so than in politics.

Consider a picture that appeared in the Wall Street Journal last week. It shows Bill Gates and Warren Buffett, sitting together on an L-shaped couch. At their feet is a coffee table, leather top, strewn with snack plates, playing cards, a folded newspaper, and underneath, a laptop. (You can guess whose.) Persian rugs are on the floor, credenzas by the wall. The two are in shirtsleeves, Gates has one socked foot up on the table. Just two guys kicking back and enjoying the special kind of moment that only the world's two richest people could understand.

What's happening here? If you are of rightward inclinations you probably see two men enjoying the fruits of their hard-earned gains. Commerce is a moral arena, money an outward expression of inner worth. If your inclinations go more to the Left, you probably see suspect lucre, and ripe targets for taxation to redistribute much of it to those with less. On one side, money is authenticity; on the other, a lack of money is. (To their credit, Buffett and Gates themselves fall somewhere in between. Buffett in particular acknowledges the role of society in his fortune, and his consequent responsibility to give most of it back.)

The picture is an ad for NetJets executive jets. Both Gates and Buffett own fractional shares in the company's planes. Buffett bought his in 1995, the ad says, and then decided to buy the whole company three years later. (Wouldn't you like to do that with certain companies that have jerked you around, and then summon the CEO to your office for a little chat?) When people like this fly they do so in splendid isolation from the indignities and hassles that beset the rest of us.

This suggests another aspect of the money issue that doesn't get enough attention - namely the way it insulates the very wealthy from the world they create for the rest of us. When people don't have to worry about medical insurance and usurious charges on credit cards, they are not inclined to make a fuss about them. People with their own estates don't experience the condition of the local parks.

A friend who worked for a very wealthy family in New York City - the family was actually a kind of corporation - told me that the children of this family, including the many cousins, had never ridden on the New York City subways despite having lived there for many years. That is hard to comprehend for most people who have lived there. For myself, the scenes inside subway cars, and empty stations late at night, loom as large in memory as does the iconic skyline over Central Park.

But people of great means get to waft above the crowds; and this helps explain why it is harder to raise money for mass transit than it is for, say, the ballet. An environmental writer for Time magazine observed a few years ago that his editors became interested in pollution of the ocean when medical debris began to wash up on the beaches of their summer homes in the Hamptons.

To this extent at least the very rich really are like the rest of us. They tend to focus most on what rattles their own cages. Taxes rattle them a lot; usurious credit card rates do not. It should not be surprising which has gotten the more legislative attention in recent years.

The nation's much-publicized wealth gap has spawned something else - a life experience gap that is even more consequential. You have heard about gated communities. We are in the realm of gated lives. Last week the New York Observer (August 27 - September 3 issue) ran an article about a big developer there by the name of Stephen Ross, who built the Time Warner Center at Columbus Circle where he lives. The story begins with a description of a typical day:

"Every morning, Stephen M Ross takes an elevator from his apartment near the top of the Time Warner Center, which he built, about 35 floors down to the 19th floor, to the offices of the real estate company that he founded. He eats lunch in the restaurants that he brought there, on the third and fourth floors, and sometimes he eats dinner there too. If he does not use the gym in his own penthouse, he works out at a branch of the Equinox health club which he recently purchased, on the lower concourse. And sometimes, when he goes out at night, he doesn't have to go out at all, because he just goes to the fifth floor, to take in a performance at Jazz at Lincoln Center."

Such a life does not inspire envy, in myself at least. It seems cloistered and a little creepy. But that's Mr Ross's problem. The problem for the rest of us is how people like him are buffered from the problems that they uniquely have the clout to do something about. This doesn't make him a bad person, only an over-sheltered one, in a way that has larger consequences for the society at large than does the size of his fortune per se.

There needs to be more attention to this side of the wealth gap issue. Moralizing over lucre and lamenting wealth distribution tables appeal to a crude kind of class envy. But in themselves they do not make a compelling case for remedy. The broken social feedback loop takes the case to another level. Not to pick on Warren Buffett and Bill Gates, who as I said are among the better ones, Buffett in particular. But if everyone like them had to fly coach, service would improve tomorrow morning.

Jonathan Rowe's blog is at .

Bill Totten


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