The Kind of Money Americans Hate

Flickr, TaxCredits.

Some don't like talking about it because it's political, but the shift in wealth inequality is one of the most important economic stories of the last 20 years.

Harvard economist Greg Mankiw -- one of the smarter economic thinkers of our day -- wrote a thought-provoking paper on wealth inequality this week that makes an important point: No one should (and few do) look down on wealth earned by those who create valuable goods and services. Bill Gates. Mark Zuckerberg. Steve Jobs. These men became astronomically rich, but they transformed our lives for the better -- and people love them for it. Mankiw's paper broadly argues that wealth inequality is a good thing if those getting rich are the Gates, Zuckerbergs, and Jobses of the world. And he's right, of course. 

Here's the problem, Mankiw writes:

The last thing we need is for the next Steve Jobs to forgo Silicon Valley in order to join the high-frequency traders on Wall Street. That is, we shouldn't be concerned about the next Steve Jobs striking it rich, but we want to make sure he strikes it rich in a socially productive way.

But he glosses over the fact that this seems to be exactly what's happening.


  • In 2007, the Harvard Crimson reported that 47% of the school's seniors were entering finance or consulting.
  • Even after the financial crisis, more than one-third of Princeton's graduating class went to work in the financial services industry. That's four times the industry's share of the overall economy. At Harvard, the figure was 28% as recently as 2008, and 26% at Yale.
  • Apple (NASDAQ: AAPL  ) and Google (NASDAQ: GOOGL  ) spent more on patent lawsuits in 2011 than on research and development, according to The New York Times.

Or take these two recent headlines:

  • "Goldman Sachs receives 17,000 applications for [a 350-slot] internship program"
  • "Companies Claim Not Enough Qualified Americans For IT Jobs"

Goldman Sachs (NYSE: GS  ) president Gary Cohn commented on the first headline: "The vast majority were highly qualified kids ... The amount of resumes we get for full-time [positions] is in the 50,000, 60,000, 70,000 range."

Meanwhile, as Facebook's Mark Zuckerberg put it in February: "Our policy is literally to hire as many talented engineers as we can find. The whole limit of the system is just that there just aren't enough people who are trained and have these skills today."

The reason the inequality debate strikes a nerve with many is that an inordinate amount of our country's brain power has gone toward financing stuff, rather than designing, engineering, and making stuff. No one wants fewer rich people. Instead, I think more people just wish the next billionaire made their fortune from engineering iPhones instead of engineering mortgage fraud.

Josh Brown summed it up best:

It is not that Americans hate successful people or the wealthy. In fact, it is just the opposite. We love the success stories in our midst and it is a distinctly American trait to believe that we can all follow in the footsteps of the elite, even though so few of us ever actually do.

So, no, we don't hate the rich. What we hate are the predators.

What we hate are the people who we view as having found their success as a consequence of the damage their activities have done to our country. What we hate are those who take and give nothing back in the form of innovation, convenience, entertainment or scientific progress. We hate those who've exploited political relationships and stupidity to rake in even more of the nation's wealth while simultaneously driving the potential for success further away from the grasp of everyone else.

That's all there is to it. 

Read/Post Comments (2) | Recommend This Article (14)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Add your comment.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2495662, ~/Articles/ArticleHandler.aspx, 9/28/2016 8:04:02 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 10 hours ago Sponsored by:
DOW 18,228.30 133.47 0.74%
S&P 500 2,159.93 13.83 0.64%
NASD 5,305.71 48.22 0.92%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/27/2016 4:00 PM
AAPL $113.09 Up +0.21 +0.19%
Apple CAPS Rating: ****
GOOGL $810.73 Up +8.08 +1.01%
Alphabet (A shares… CAPS Rating: *****
GS $162.89 Up +1.41 +0.87%
Goldman Sachs CAPS Rating: ***