Are the one percenters running for cover? Should we care?
By Paul Wilson
The Occupy Wall Street movement has, at times, been labeled as disorganized, unfocused and far worse. But whatever one’s feelings about the protests, they’ve helped draw attention to an issue that’s close to many Americans’ hearts: inequality.
One of the main targets of Occupiers’ wrath is the so-called one percent, the richest of the rich. By now, we’ve heard plenty of barbs about them too, but a recent blog by Richard C. Morais on Barron's attempts to paint a different picture.
Citing an upcoming report from the Harrison Group and American Express titled “2012 Survey of Affluence and Wealth in America,” Morais makes the case that the one percent are more like the rest of us than we might think.
For example, approximately two-thirds grew up in a neighborhood that was middle class or poorer, while three-quarters describe themselves as “middle class” at heart. And contrary to popular belief, just 3 percent of their assets are inherited, while 85 percent acquired their wealth during their lifetime.
But according to the report, this group is growing increasingly guarded and disengaged in the face of the nation’s amplified scrutiny, cutting themselves and their investments off from the rest of society.
For example, members of the one percent nearly tripled their savings rate between 2007 and 2011, from 12 percent to 34 percent, according to the report. Meanwhile, the percentage of those savings being placed into “personal savings and money markets” that earn low returns and focus on safety has risen from 24 percent to 54 percent, while the percentage invested in “financial products and markets” has fallen from 76 percent to 46 percent.
So, why should the average American care that this super affluent demographic is “putting their money under the mattress?”
According to Morais, “These people are, by definition, risk takers, and yet they’ve stopped taking financial risks. They are, in the words of the report, ‘irrationally defensive.’”
He also goes on to cite statistics about how the one percent are now less likely to participate in social events within their communities and prefer to spend their time only with close friends and family.
“For those who perceive themselves as “Middle Class” at heart – repositories of all those hard working and family values that added greatly to our nation’s fabric – it is a great shock to suddenly be vilified as social villains,” he writes.
Later, he states, “So let’s take a deep breath. We must respect the Wall Street protestors for acting as a kind of conscience for the nation, their chants and drumming a kind of cri de coeur that all is not well with the nation. But we should also recognize that Witch Hunts are also very much a part of the country’s DNA, and the demonizing of the wealthy has finally reached a dangerous tipping point for the nation.”
Despite his emotional plea, I’m not sure that his message had its intended effect, based on the comments section.
“This article is sadistic. 1% have the best breaks in life. Now they’re so thin skinned and emotional. Please. Lack of demand because productivity has risen and they had to hoard all the gains instead if paying their fair share of taxes rather spend bribe money getting more tax breaks,” says one anonymous commenter.
“Yeah, as a one percenter they pretty much nailed my situation. The 99% want my money, but even IF they had the brains (which is not certain at all) they don’t want my work schedule. You can’t always have time AND money. If they tax away my money then I’ll definitely have more time. Because I sure as hell won’t keep doing the work,” sneers another.
Ah, Internet discourse at its finest.
Still, the blog brings up some interesting points. If the super affluent are indeed reducing the amount of risk in their financial strategies and placing their wealth into safer investments, what does that mean for the nation? How about the insurance industry? And what about the reported attitudes of the one percenters? Do you think their hurt feelings are justified or do you find it hard to sympathize?
Oh, and can I please count on you to write something more thoughtful than those other guys did?