Beverly Hills As The USA

Imagine that you lived in Beverly Hills, among the richest people in the United States. Some of your friends were the kids of executives at Fortune 500 companies. Others were the kids of famous Doctors, Lawyers, and some were the kids of hedge fund managers. While all relatively rich, assume there was quite a range of wealth from really rich, to filthy rich.

Further assume, that one day, a bleeding heart liberal starts feeling bad for the really rich. Her complaints are along the lines of: “The really rich can’t eat out at the $500/plate restaurants, they have to settle for the $100/plate restaurants, or, god forbid, make sandwiches at home”. Her complaints continue: “The really rich can’t afford the Lamborghini’s or Ferrari’s, they have to get by with the – GASP! – BMW’s and Mercedes Benz’s”. Worst yet, “the really rich actually have to live in mansions with no ocean view, or golf courses”. Most heartbreaking of all, “the really rich have to actually prioritize their lifestyle and set a budget. They can’t go to Europe on a moments notice, they can’t eat out everyday”.

Now further assume that said bleeding heart liberal decided to set up an “alleviate suffering” fund that took away from the filthy rich to give to the really rich. Such a fund would help equalize Beverly Hills and “bring people together”. But instead of making this fund voluntary, the bleeding heart liberal wanted to enforce this through the city. She wanted to make it a city tax that merely takes from the filthy rich and gives to the really rich. Her arguments, again, are to “alleviate suffering”.

What would your reaction be if you were suddenly transplanted to that society and debate? Would you support the “Beverly Hills tax”? I am not one of those that believes there are absolutely no circumstances that justify forcibly taking the wages of one to give to another. But such circumstances have to be met with atleast reasonable justification. Yet simply moving money around amongst the worlds richest people does not seem to me like an acceptable justification.

Such is the image that comes to mind whenever I have a discussion with a liberal about increasing redistribution via taxes to help the USA “poor”.  It’s the image my dad and uncles, who immigrated to the United States in their twenties from ranch life in the poorest parts of Mexico, gave me. It is certainly how they viewed me and my cousins growing up – no matter what our circumstances, be it growing up in Compton (as I did), living off of the income of mechanics, gardeners, or window tinters – we were all blessed beyond their wildest dreams. Where they had to eat tortillas off the dirt floor, work in fields in the scorching heat where there were no “sick days” or “vacation time”, even the McDonalds cashier can seem privileged. And this view isn’t far from reality. Even the “poor” in the United States are among the richest in the world (see here and here).

17 Responses to “Beverly Hills As The USA”


  • You make a good point. Some perspective is needed here for sure.

    On the other hand I say don’t let the better be the enemy of the good. Probably it would be better to focus on third world suffering more than domestic suffering. At the same time why stand in the way of improving the domestic situation?

    Go to Wal-Mart and check the 70 year old lady greeting you at the door, standing on her feet a few hours a day and going home doing what she can to alleviate the pain. It’s better than having AIDS in Botswana, but if we can improve the situation, why not? Unless you can show that helping that 70 year old lady somehow induces further suffering for Africans. I don’t think you can make that case credibly.

  • So you would support the Beverly Hills tax then Jon?

    Maybe you are right – I doubt it, but don’t say for sure – that redistribution would on net reduce suffering. But even so, it’s very small on the grand scale of things. This is why I don’t get too worked up about it, either way.

    Add in the fact that the 70 year old working at Wal-Mart is likely there because of her own decisions, and it makes the moral imperative even less – in such circumstances, I could make a decent argument that in fact the moral imperative points in the opposite direction.

    And I say this as someone who has multiple aunts and uncles (~10) here in the United States who immigrated here in their early twenties, without ANY education, ability to speak the language, and any connections and yet now, in their older years, were able to save enough to retire comfortably – some even earlier than the average American. And yet they all worked blue collar workers: as gardeners (2 uncles), window tinters (1 uncle), mechanics (2 uncles), phone operators and house wives (aunts).

  • Yeah, your point again is a good one, and I give you credit on this. You’ve helped me recognize this point. This is America. Poor here isn’t that bad.

    One reason I do talk about this stuff though is because I think you need to talk most about what you can control. You could take the case of Africa, maybe N Korea which is probably worse. What can you do about these situations? I can’t control that. I must focus on that which I can control. SS is a political issue in the US that the populace can effect. People do suffer. I want to see it get better.

    But for you to just say forget about that and look at Africa, yeah, I think that makes good sense. Assuming you are talking about it and trying to change it. Don’t just use it as a tool for distracting us from real problems in the US. Yeah, if you make effort to resolve suffering in Africa first I’d say that’s commendable and perhaps something more of us should do.

    In the US if you’re single and make $10K, or suppose you have a family and you make $20K, relatively life is pretty good. Actually my brother is in that world. Makes something like $20K. Perfectly happy. Lacks nothing that he needs. Married a great girl and has two happy daughters. You can be happy on that amount.

    The one area where I disagree with you though is I have more empathy than you for people that own too much house or too much car. My brother is very smart about how he lives in that regard, and I think it’s very easy to fall into the debt trap. I do feel bad for those people. And I know them. Working 60 hours a week to feed a mortgage. House under water. Feeling totally trapped. My brother has been smart enough to avoid that trap, so there’s no reason to feel sorry for him. He’s living a great life. In fact another relative needed some financial assistance a while back and those of us that could send him money did so. My brother was able to send a fair amount also, like it wasn’t even difficult for him. It’s very doable if you are smart about it.

  • Imagine that you had the wealth of Bill Gates and that you lived part-time in your summer palace built on the banks of the Congo River in Kinshasa. Nearly everyone around you is living at poverty level. Disease runs rampant. People regularly die of hunger. The average annual income is south of $500. Meanwhile, your mansion is 30,000 square feet of luxurious living. Three swimming pools, ten bathrooms, three grand pianos, etc.

    Further assume, that one day, a bleeding heart liberal starts feeling bad for your neighbors. Her complaints are along the lines of: “With the water rights that you legally purchased to divert water from the river to the swimming pool, and with the filtering system that you built for your swimming pools, you could have funded water systems to provide clean drinking water for your neighbors, rather than deplete their already scant resources for drinking, washing and fishing.”

    Now further assume that said bleeding heart liberal decided to set up an “alleviate suffering” fund that took away some of your money to give it to the poor, sick and dying. Such a fund would help equalize the Congo and “bring people together”. But instead of making this fund voluntary, the bleeding heart liberal wanted to enforce this through the city. She wanted to make it a city tax that merely takes from the filthy rich and give to the poor, sick and dying. Her arguments, again, are to “alleviate suffering”.

    What would your reaction be if you were suddenly transplanted to that society and debate? Would you support the tax?

    HispanicPundit is one of those that believes there are absolutely no circumstances that justify forcibly taking the wages of one to give to another.

    I respectfully disagree.

    (Also, you forgot to mention that the “bleeding heart liberal” in your story is apparently an elected official. It seems relevant to your story that the values of the community seem to be reflected in the “bleeding heart liberal” – otherwise they wouldn’t have elected her, right?)

  • If perhaps I wasn’t clear in my previous comment:

    You have set about showing that there exists at least one circumstance under which most of us would not approve of a “redistribution” tax. From there, you state that there is “no circumstance” under which you would support such a tax. The one doesn’t follow the other. “Any” is not the same as “one”.

    To prove that point, I have provided a circumstance under which most of us would pretty much immediately approve of such a tax.

  • 70% of Mexican-American children drop-out of high school, genrally, in the 8th grade. When our Mexican-Ameerican nephew gradauted from high school, we were so proud.

    His father comes from a Mexian farm. He is so proud too. But he doesn’t insist that his son get an education or even go to a Community College. They, afterall, live in a house with a floor.

    As a taxpayer. I’ve provided my nephew with a Community COlege and a fine State University system TO ENVY! All to get him moving in the proper direction, up the economic ladder.

    Your arguemnets ask us to consider what is reasoanle. In my nephew’s situation, are taxpayers being too stingy or reasonale?

  • Jon,

    A few responses.

    One reason I do talk about this stuff though is because I think you need to talk most about what you can control. You could take the case of Africa, maybe N Korea which is probably worse. What can you do about these situations? I can’t control that.

    But your level of control is very very small – if measurable at all. You are but one voter in a sea of MILLIONS. Trying to change policy at the individual voter level is, frankly, practically useless. In fact, in my analogy above, the bleeding heart liberal has FAR more control – atleast she is trying to change the policy at the city level, instead of at the federal level. Yet even then, I would consider her cause a near waste of time.

    If you want control, volunteer for a charity that directly helps people in the poorest parts of the world. I guarantee you that if control is what you are after, measured in actual results and ‘alleviating suffering’, you get ALOT more bang for your buck in that situation.

    The one area where I disagree with you though is I have more empathy than you for people that own too much house or too much car.

    That’s one way to phrase it. I would have stated it as: “The one area where I disagree with you (Jon) though is I (HP) believe more in personal responsibility than you for people that own too much house or too much car”. :-)

    LaurenceB,

    I think you misread my post. I specifically said that I am NOT one of those who believes there is NO circumstances which justifies forcibly taking the wages of one to give to another. I wrote:

    I am not one of those that believes there are absolutely no circumstances that justify forcibly taking the wages of one to give to another. But such circumstances have to be met with atleast reasonable justification. Yet simply moving money around amongst the worlds richest people does not seem to me like an acceptable justification.
    (emphasis added)

    Let my try to state my point another way: for one to have justification in forcibly taking the wages of one person to give to another, atleast three conditions have to be met. First, there has to be real poverty, second the recipient has to be deserving of the stolen wages, and third the act of redistribution has to, in the end, be likely to make things better.

    In my analogy above, I was merely trying to isolate the first prerequisite. I certainly agree with you 100% that as those “poor” become truly poor, the justification for forcibly taking ones wages increases – dramatically.

    With that said though, you need more then mere poverty. If, for example, we had a situation where people were truly dirt poor because every time they had extra income they spent it on drugs, or gambling, or any other conscious vice, then that certainly reduces the justification of redistribution. Same goes for my third prerequisite.

    I certainly was not making the argument that finding redistribution in my analogy unacceptable ipso facto makes all redistribution unacceptable.

    Frankie,

    You ask, In my nephew’s situation, are taxpayers being too stingy or reasonale?

    I assume by this you mean whether or not tax payers should pay more or less to community colleges and state schools? If that is your question, I would say less. In fact, my preferred method of helping the less fortunate attend college is for the state to pay less to the institutions – like the colleges and universities – and more to the poor people themselves. It would be like asking, assuming reducing hunger is your goal: Should the state give hungry people directly money to buy food, or should the state subsidize grocery chains – which serve everybody, hungry and full – in the hope that that trickles down to the hungry people? Most people would choose the former. So would I.

    With that said, I would still be against 100% coverage by the state. Students, no matter how poor, should have some skin in the game. After all, it is they that will reap the rewards and the education is providing some value to them. In addition, it’s regressive – taxes usually come from a pool of people who mostly never went to college, and taking from them to give to those who do is somewhat like taking from the poor to give to the rich. Lastly, and probably the most important reason, having put your own sweat and blood into it makes you appreciate it and value it more. It should never be completely free.

  • You have to balance the severity of the suffering with your level of control. I may have less control over SS but the severity of the problem is more intense than the Beverly Hills people. Voting is not worth much, but grass roots organizing is.

    It’s not that I don’t believe in personal responsibility. I think the difference between you and me is I acknowledge the social pressures that lead others to make poor decisions and you tend to ignore those factors like they are irrelevant. Advertising, other forms of marketing, social convention. For me these are factors for some poor decisions.

  • Jon,

    I may have less control over SS but the severity of the problem is more intense than the Beverly Hills people.

    I disagree. I think if you look at the situation from the perspective of say an Alien, with no national biases and taking all world suffering into account, the SS issue in the USA is not that much different than my Beverly Hills example.

    It’s not that I don’t believe in personal responsibility. I think the difference between you and me is I acknowledge the social pressures that lead others to make poor decisions and you tend to ignore those factors like they are irrelevant.

    But this is what personal responsibility is all about. Nobody makes perfectly informed decisions. We are all biased in some way.

    Yet many many people – your brother included – find a way to ignore such advertising and marketing pushes. Yet under your system, and SS in general, you punish people like your brother to pay for people who made bad decisions.

    Not only does this fail my first prerequisite (real poverty), but it fails my second (deserving).

  • HP,
    You are absolutely right – I did misread your post. My apologies.

  • A problem with using SS as an example is that it distributes money from the poorer to the wealthier in many cases. Older people tend to have accumulated wealth, while the younger haven’t. African Americans and Hispanics have a lower average lifespan than whites, and therefore tend to collect less than whites. According to this site [http://www.nber.org/digest/mar02/w8625.html] “One in five individuals in the top 20 percent of the lifetime income distribution receive greater net transfers than the average for people in the bottom 20 percent of the income distribution.”

    If helping disadvantaged Americans while respecting peoples life choices is the goal then getting rid of our drug laws should be among the highest priorities. The half a million people locked up for doing something that should be no one else business I would actually consider legitimately unfortunate. But because drug laws are democratically popular, it doesn’t look like it will change.

  • Here’s another way to help Africans. Americans consume more fuel to power A/C than the entire continent of Africa consumes for all purposes.

    http://e360.yale.edu/feature/cooling_a_warming_planet_a_global_air_conditioning_surge/2550/

    If we made some sacrifices that allowed us to consume less fossil fuel (say the government funds efforts to increase our reliance on renewable energy, or perhaps regulates the amount of A/C use) this would directly help Africans because reduced demand for fossil fuels would be reflected by a reduced price. Now they can consume more for the same price. Do you support these means of reducing US energy consumption?

    Or take a look at how much food is grown merely to provide cattle feed. Experts say that Americans eat too much meat. They also eat too many calories. Reducing our meat consumption would be a far more efficient use of our crops. Reducing our caloric intake would likewise reduce demand for food, resulting in falling prices and correspondingly more available for Africans.

    At my blog you say you want to eliminate SS to help Africans, and I think the causal links there are quite tenuous. I think the causal links between the policies I suggest are more straightforward. So if you are really concerned with the plight of Africans I suppose you support these efforts. Or you have other suggestions that are more workable.

    Because if you only support helping Africans when that means policies that align with Republican/corporate preferences, that’s not good.

  • Krugman addresses the claim that blacks are harmed by SS here:

    http://www.pkarchive.org/column/012805.html

    Your link at nber says that 1 in 5 of the wealthy do better than the average of the poor. So 4 in 5 do worse presumably? The nber link makes it clear that SS is redistributionary and talks about the steps that would need to be taken to ensure that personal retirement accounts were similarly regressive. Moving to PRA’s could easily lead to a more regressive situation since SS is a progressive program. Part of the reason 1 in 5 do better is because sometimes people live longer than average and sometimes they don’t. So sometimes an elderly rich person will draw benefits for a long time, nullifying the progressive intentions, but other times the reverse will happen, so on net it’s a progressive program. And the evidence is that it has had a major impact on elderly poverty.

    http://www.nber.org/bah/summer04/w10466.html

  • I mean “steps that would need to be taken to ensure that personal retirement accounts were similarly progressive.”

  • I think the best way to help Africans is via markets and job growth. It’s the most sustainable method. It feeds them today, and feeds them into the future – all the while increasing the standard of living for all. In other words, it is the only positive sum (as opposed to zero sum) method there is.

    This is why I push for more free trade and globalization (see here and here for more).

    With regard to SS and helping Africa, let me make my point clear since I wasn’t clear before: My arguments for or against SS have really nothing to do with poverty in Africa. My point in bringing up Africa was not to justify my SS arguments, one way or the other – but to put a stop to the whole “SS is for the poor” argument.

    Like my Beverly Hills example above, I think using ‘the poor’ card in SS discussions is meaningless and doesn’t really address what the “poor” really is. Hence my rebuttal of, ‘if you really want to help the poor…’

  • Saying the solution is job growth is like saying the solution to war is peace and love. Vague and unhelpful. Saying markets feed them today is like saying slavery and feudalism fed people in the past. Yeah, but so what? Totalitarianism fed Russians for a long time, but I don’t advocate it.

    Life expectancy in sub saharan Africa is finally getting back about to where it was in 1980. Notice the growth prior to 1980. Pretty steady.

    http://www.eritrea-chat.com/life-expectancy-is-increasing-in-sub-saharan-africa/

  • Whether or not some group benefits more it remains that many individuals in the lower ranks of American wealth will not benefit from SS, while significant numbers of wealthy will benefit. I don’t find redistribution or progressivity to be a good thing necessarily, so I won’t comment on that.

    When nber makes the claim that ss has had a major impact on poverty on the elderly, it doesn’t make the claim that the benefits outweighed the costs. In order to assess any system the costs have to be weighed, and I don’t see that.

    In any case, when we argue about SS, we are arguing about the wealthiest, most privileged people in the world for the most part. Whether or not it could be changed in such a way that you find it “better” somehow through the democratic process, it stands that SS is shuffling money from one group of people in the top 1% to another group in the top 1%. It seems silly to defend it when there is so much low hanging fruit in the US, like the drug war, e.g..

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