Michael Mechanic’s deep dive into the super-rich

IMAGE A GAME Monopoly in which you start with $ 500 and your opponent receives $ 2,000. They pass Go several times before you because they roll with two dice, and their payout is double yours. They’re the one percent, and you’re middle class, and from the start, they’re winning. The game is rigged. Except there isn’t enough money in the game if you want to get the right financial ratio. Do you want to pit the middle class against 0.001%? You’re gonna need all the money inside 163 Monopoly sets. Want to play against Jeff Bezos? That’s 17,973 banks.

the Monopoly The metaphor, while a bit worn, is one of Michael Mechanic’s ways of describing the American wealth gap. In his new book, Jackpot, the editor-in-chief of Mother Jones magazine peels back the layers of what it means to be mega-rich – from bargains that have propelled them into the 1% to what their mere existence says about inequality in the United States.

After a year of calculation with material and racial inequalities, Jackpotthe timing is ideal. If there has ever been a time to question our collective attitude to extreme wealth, it is now. At the start of 2020, he writes, “Americans owed more than $ 14 trillion in mortgages, auto and student loans, and credit cards, and that debt is a huge source of family stress. No wonder we keep buying lotto tickets. Mechanic cites a study in Nature Human Behavior, which revealed that in the United States and Canada, we “tend to reach a peak of satisfaction when all of our basic needs are met and we no longer live in fear of our credit card bills.” What does it look like? We get a hit with satisfaction when our annual income increases, our emotional well-being reaching around $ 75,000 per year. Earning more gives you the chance to splurge, but as Mechanic points out, “You can only live in a house and wear a pair of Yeezys at a time.” Your first home might blow you away, but your third? Your fourth? Your sixth?

The richest Americans are hopelessly addicted to this dragon hunt, finding endless ways to waste millions. The mechanic dwells on a few: bespoke costumes in pure vicuña, shots of Louis Treize cognac for $ 300, a Rolls of the shade of your signature lipstick, a gigantic mansion equipped with several panic rooms. , nannies trained in counter-surveillance, and an Amex black card who can send an agent to get Dead Sea sand for your child’s school project or track down Kevin Costner’s horse from Dance with the wolves. You name it, you have it. The people with the most money also seem to get the most freebies. Why pay for a private jet to Bermuda when one friend can lend you their plane and another can give you spare keys to their beachfront mansion on a private island for free? It’s easy to see how the wealth begins to pile up.

While reading all the absurd things that large amounts of money can buy elicits a certain joy in reading voyeuristic hate, it is sobering to see how wealth erodes attitudes towards work, purpose, and integrity. The mechanic wonders if your work ethic is irrevocably altered when you reach extreme wealth: “How safe would it be to stay in a job that pays you $ 40 an hour while your portfolio hovers at $ 400,000?” per week one way or the other? ” It changes everything. How could he not?

One entrepreneur tells Mechanic that when luck brings a financial windfall, “you go from that mindset of creating wealth to preserving it. […] You put up the walls and you want to keep it and protect it and defend it and God forbid, somebody take it from you. […] You are fear based now.

It is this fear that drives the super-rich to stick together against reforms that could even challenge the economic playing field. Although they tend to be “more progressive than the general public on social issues such as abortion, criminal justice reform and marriage equality,” the super-rich – who often have lines of thought. direct communication with our elected government officials – are “significantly more conservative.” on economic issues such as taxation and rights and the role of government in helping the poor.

They have won the golden ticket, but managing that level of wealth becomes a full-time job if they are keen to preserve it. Enter “family offices”. These limited liability companies team up with wealth managers, property managers, lawyers and accountants to monitor their estates, pay their bills and settle their tax disputes. Want this super-yacht, but don’t want to pay sales tax? Drop anchor just outside the state’s territorial waters and helicopter the lawyers to close the case. Remember to take a photo of the GPS coordinates with both signatories in the frame. How about a 1966 Ferrari worth around $ 2 million? Register the vehicle in a neighboring state with lower taxes. Or better yet, ask your front company to make the purchase.

But what about philanthropic initiatives? It’s just a way for some of America’s wealthiest families to legitimize their largesse in the eyes of society, argues Rob Reich, a Stanford political science professor who identifies the philanthropic gestures of the super-rich as an “exercise in reputational laundering to build an aura of altruistic welfare and distract people from dealing with the source of the money. According to tax laws, US donors can deduct charitable donations up to 60% of their income taxable, but to reap the rewards you have to itemize them. Yet only about 13% of taxpayers itemize, and most of them are in the highest percentage of employees. The higher the tax bracket, the larger your grant. While large donations seem impressive, they ultimately cost the rest of us money while the rich ga more and more theirs.

Towards the end of Jackpot, Mechanic looks specifically at the wealth held by minority actors. Although he limits his analysis to black Americans and women, the statistics are concerning. Middle-class assets tend to be focused on homeownership, but looking at census data, redlining has taken its toll, as “white property is now around 76% versus 47% for black Americans, and this data does not take into account the value of these houses. What’s more, research shows that in almost every state, black and Latino neighborhoods pay 10 to 13 percent more in property taxes for the same level of utilities. Finally, according to Wealth-X, “we should have at least 105 black billionaires. We have seven, ”Mechanic notes.

Are we going to women? “Not only are women more likely than men to be poor, they are much less likely to be very wealthy,” Mechanic writes. Looking in particular at the world of finance, “a tiny 3% of the total assets held by US hedge funds launched from 2013 to 2017 were managed by companies run by women – there were more funds started by men. named David only by women “. It’s not just that the most lucrative industries like tech, crypto, and blockchain are dominated by bro culture. The brothers claim that women are just more risk averse, but what about the fact that these industries typically create harsh environments for women depending on the corporate culture?

Like Jackpot progresses, the fun at the ridiculous way people spend their money turns into deep discontent. Why are we letting them get away with it? How to compete with the attraction of the unattainable which allows this system of inequalities to last most of the time without control? Mechanic argues that our desire to get rich isn’t the problem – it’s the “uniquely American notion that anyone can be successful with courage and intelligence and hard work, [leading] we not only tolerate mind-boggling economic injustice, but support the kinds of policies that produced this mess in the first place. Our overwhelming optimism is rooted in stories like the Horatio Alger Jr. Ragged cock, the story of an impoverished shoe shiner who becomes a member of the upper middle class thanks to his dynamism, and James Truslow Adams’ conception of the Golden American Dream. If we all keep the belief that if we run a little faster, work a little harder, play the actions a little smarter, we will live in the seaside mansion, we will never bring the super rich back home. Earth.

In the end, Mechanic takes an optimistic stance, if only on everyone’s best intentions: “No CEO, investor or rich person wakes up in the morning, looks in the mirror and says : ‘Today I want to go out and create more inequality in America.’ And yet, all too often, this is exactly what happens. Mechanic recognizes that our fantasy of collective wealth has always been with us – from the early settlers of the Virginia Company to graduate students who left for Wall Street with finance degrees in hand – and we’d be hard-pressed to shake it off. Still, there is no better time than now to give it a try.

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Lauren Sarazen is a freelance writer who lives in Paris, France. His words appeared in The Washington Post, VICE, She, and Air mail, among others.

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