Law Professor's Blog Post Sparks Controversy Over Why The Rich Don't Feel 'Rich'
UPDATE: Citing a "firestorm" of "lies and misinformation," Henderson vowed on his blog this morning to quit blogging. "I misunderstood the technology, and the consequences are devastating for me personally," he writes. "I am sad to leave, but my family has to come first, and my blogging has caused them incalculable damage." Henderson told Business Insider that his family is "on the verge of disintegrating."
Law professor Todd Henderson's now-infamous blog entry about the mindset of the rich has incited such an uproar that he felt he needed to delete it.
An "electronic lynch mob," he wrote yesterday, "caused untold damage to me personally." But despite the apparent hate-mail, the original post, which University of California, Berkeley, economics professor Bradford DeLong re-posted for the sake of the "conversation," has also inspired a legitimate debate about an idea that typically makes people either furious or embarrassed. In short, the rich don't feel "rich."
In response to Obama's proposed tax hike for people making more than $250,000 a year, Henderson writes, ironically, "that makes me super rich." He goes on, for nine paragraphs, to explain why he actually isn't rich, finally extending an invitation to Obama to "judge for himself whether the Hendersons are as rich as he thinks."
The responses, some of which DeLong has posted on his blog, are largely aggressive. Law professor Michael O'Hare mockingly compares Henderson to someone in "scuffed Gucci loafers and tattered Armani," living in a "million-dollar hovel." But others are more thoughtful.
After first refraining from comment, DeLong made the point that those who are indeed rich don't feel that way. Here's Delong
Instead, Mr. Xxxx Xxxxxxxxx looks up. Of the 100 people richer than he is, fully ten have more than four times his income. And he knows of one person with 20 times his income. He knows who the really rich are, and they have ten times his income: They have not $450,000 a year. They have $4.5 million a year. And, to him, they are in a different world.
And so he is sad. He and his wife deserve to be successful. And he knows people who are successful. But he is not one of them--widening income inequality over the past generation has excluded him from the rich who truly have money.
And this makes him sad. And angry. But, curiously enough, not angry at the senior law firm partners who extract surplus value from their associates and their clients, or angry at the financiers, but angry at... Barack Obama, who dares to suggest that the U.S. government's funding gap should be closed partly by taxing him, and angry at the great hordes of the unwashed who will receive the Medicare, Medicaid, and Social Security payments that the government will make over the next several generations.
Felix Salmon concurs, adding some gentlemanly defense of Henderson:
There's no doubt that people earning $250,000 or more are rich. The simple ability to dismiss a whole class of expenses as "only a few hundred dollars per month in total" makes you rich.
But by the same token, many rich people don't feel rich, and so describing them that way gets their backs up. And in fact it's good that the rich don't feel rich: it means they have more incentive to keep on earning and producing and adding value.
So maybe we shouldn't be so rude about the likes of Todd Henderson: without rich people constantly striving for extra dollars, America would be in an even worse position than it is. But equally, we shouldn't take their pleas seriously.
But 30 years ago people with high but not super-high incomes generally felt ashamed of themselves for griping -- or at least, felt that they would be ridiculed if they gave voice to their gripes. Today, all restraints are off. The fuss over Messrs. Henderson and Stein is the exception that proves the rule: they wouldn't be providing this spectacle if they didn't normally swim in social circles where complaining that you only have 9 or 10 times median family income is considered totally acceptable.
Pretty soon, we'll be having serious, completely un-self-conscious discussions in major magazines about the servant problem.