What Wealth Does To Your Soul – Part 2

With this post I will conclude my discussion about what might make the wealthy among us seem so callous to others needs. The source for these posts came as a surprise to me. Here is some more quotes from that article.

A UCLA neuroscientist named Keely Muscatell has published an interesting paper showing that wealth quiets the nerves in the brain associated with empathy: If you show rich people and poor people pictures of kids with cancer, the poor people’s brains exhibit a great deal more activity than the rich people’s. (An inability to empathize with others has just got to be a disadvantage for any rich person seeking political office, at least outside of New York City.) “As you move up the class ladder,” says Keltner, “you are more likely to violate the rules of the road, to lie, to cheat, to take candy from kids, to shoplift, and to be tightfisted in giving to others. Straightforward economic analyses have trouble making sense of this pattern of results.”…

THERE IS AN OBVIOUS chicken-and-egg question to ask here. But it is beginning to seem that the problem isn’t that the kind of people who wind up on the pleasant side of inequality suffer from some moral disability that gives them a market edge. The problem is caused by the inequality itself: It triggers a chemical reaction in the privileged few. It tilts their brains. It causes them to be less likely to care about anyone but themselves or to experience the moral sentiments needed to be a decent citizen….

There is a growing awareness that the yawning gap between rich and poor is no longer a matter of simple justice but also the enemy of economic success and human happiness. It’s not just bad for the poor. It’s also bad for the rich. It’s funny, when you think about it, how many rich people don’t know this. But they are not idiots; they can learn.

SOURCE:What wealth does to your soul – The Week.

I’m still not convinced that the lack of empathy is a result of a chemical change in the brain but it is interesting to think about that possibility. What happens if the rich person looses all his wealth? Will empathy come back? I kind of believe that it is more of a learned thing or maybe one of a rationalization based on greed. Yeah this is kind of chicken/egg thing. Which came first the riches or the lack of empathy?

My empathy is such an important part of my life I can’t imagine someone who doesn’t embrace it in themselves. It just seems too cold and callous to think only of yourself. To me that wouldn’t be a life worth living.

The gap between the rich and the poor grows daily now and since the rich have consumed almost all of the political and economic power it will only get worse unless something radical changes it. Wall Street is driven almost totally to providing profits to their share owners. There is little regard for workers in today’s world. As the highlighted area says I don’t think the rich are idiots but I can’t fathom why they don’t understand that when you put a stranglehold on consumers by not letting them share in the prosperity you endear you are drying up the well that give you your wealth.

Common Sense…..

Call them the invisible rich. How do they do it? Sure, money like that sometimes comes from an inheritance or another fortuitous break, but more likely it’s the result of diligence, smart choices and, well, deferred gratification.

SOURCE: Wealth-building secrets of the millionaire next door – Yahoo Finance.

Wealth-building secrets of the millionaire next door

It seems like there are thousands of articles and books lately to tell you how to become rich. But do any of them actually have anything unique to say? I am not going to go into the details about the above article other than to give you the topic titles.

* They Don’t Spend Beyond Their Means

* They Educate Themselves

* They Pick the Right Field

* They Save (and Invest) Early

* They Don’t Swing for the Fences

* They Keep Themselves Covered

* They’re Wise About Windfalls

* They Hang Onto Their Cars (and Houses)

* They Avoid Debt

To this old Midwestern boy all these things just seem like common sense. Sure some like picking the right field are more luck than anything, but most are achievable by most of us if we just stick to it.  I really don’t know what keeping myself covered has to do with anything but I figure I must have done a good job at it since I am pretty well covered today. 🙂

Never had a windfall except for the new fishing reel I got as a young boy from my grandfathers estate. Now I am not a millionaire but I think I do have enough to keep me going for the final years of my life. But to me the point of life is not financial wealth building (easy for someone to say who has enough) but more along the lines of morality building and trying to treat the other guy with respect whether he deserves it or not.

But given the statistics lately it seems that most just can’t seem to live by the standards above. Maybe they should be teaching more about that in our school systems? I don’t know about wealth-building but I think I have done a pretty fair job of paying forward for all the good fortune I have had in my life. I might have had it tough in some regards, losing my mother in early life and losing hearing at mid-life was no joyride, but I had it a lot easier than many folks I came across in life….

 

Swiss, U.S. reach deal on outing tax evaders

The U.S. government and Switzerland have reached an agreement that could expose Americans who have used Swiss banks to avoid paying taxes….

The crackdown began in 2009 after a whistleblower notified U.S. authorities that UBS, the largest Swiss bank, was enabling Americans to evade taxes.

UBS settled the case later that year. It turned over account records on 4,500 U.S. customers and paid a $780 million fine

SOURCE:  Swiss, U.S. reach deal on outing tax evaders – CBS News.

I have absolutely no sympathy for those caught trying to hide their wealth in swiss banks in order to avoid paying their fair share of taxes.  It is about time that the Swiss were held accountable for their part in this activity. I certainly celebrate those who through their own initiatives have become wealthy in the country. For the most part they deserve to have the fruits of their labor. But as the bible says for whom much is given much is expected.

Prior to the establishment of personal income taxes in 1913 (yes, just a hundred years ago) almost all the money needed to run our government in doing the people’s business came from inheritance taxes and import taxes. I wonder what this country would look like today if that means of funding had continued? I kind of think we would probably be  better off than what we are now.  Instead of taxing those who have little or no discretionary income why not depend on wealth returning to where it came from after someone dies?

Getting back to the point of the post, it seems that the more money someone has just increases their fixation on getting more and more and paying out less and less. They let money become the idol of their lives. In that regard  the sickness is much worse than the cure. It does my heart good to see that those who try to hide their wealth in order to avoid taxes are getting caught more frequently today thanks to the revised Swiss practices. But I’m sure there are many more than the 4,500 who were turned over. Probably orders of magnitude more…..

Taking It From Somebody….

The difference between our rich and poor grows greater every year. Our distribution of wealth is getting more uneven all the time. . . . A man can make a million over night and he is on every page in the morning. But it never tells you who give up the million he got. You can’t get money without taking it from somebody. – 1 June 1930  Will Rogers

As Will points out here the difference between the rich and the poor has always been greater than many of us would like to see but I really don’t think in Will’s day it was even remotely as wide a gap as it is today.   The latest statistics show that there is about $58 trillion of wealth in the U.S.  But as the chart to the right shows 80% of the population  controls only 7% of the wealth. That is about $10,000 per person for 80% of us. The top 1% average $7,000,000/person.

But as Will further points out that there is just so much wealth that can be owned. There has been a twenty fold increase in billionaire in the last twenty years.  In order for the money to come to them it had to come from someone else. Of course we all know where it came from. It came for the wages and benefits of the 80% that have actually decreased over that same period of time.

I’m not a financial wizard but it really doesn’t seem like rocket science to me to understand that if we want to grow our GDP we must have citizens who have the money to buy additional goods and services. The 1% can only buy so many jets and yachts. 🙂   In fact most of their increased wealth is likely just sitting in off-shore accounts accumulating interest.  When the elite among us insist on stagnating wages there are no additional resources to grow our economy. It is a Catch-22 and that I can understand so why can’t the big shot economists in the gOp figure it out?

The Shrinking Middle Class….

I am adding a new category starting with this post. It is entitled “The Shrinking Middle Class”.

Here is one of the reasons why I am doing that. It is well into the Fall season here in the Midwest and soon all the outside work will be over. That means about five months of pretty much staying in the “cabin”. To ward off cabin fever I usually try to take on a special project for each in-door season. The project this year will be to learn as much as I can about the history of the middle class and the possible causes of its recent decline. ”

All Rich Guys Think They are Infallible….

via Jack Welch: I was right about jobs report – Oct. 9, 2012.

Welch, the former CEO of General Electric, had previously contributed content to Fortune, but following critical coverage of his comments on the jobs report and tenure at GE, Welch said in an e-mail Tuesday that he was terminating his contract with Fortune.

In his WSJ op-ed, Welch suggests that the reaction to his criticism of “the ruling authorities” was something he would expect in Soviet Russia or Communist China. “Nope,” he wrote, “that would be the United States right now, when a person (like me, for instance) suggests that a certain government datum (like the September unemployment rate of 7.8%) doesn’t make sense.”