“No man is rich enough to buy back his past.” -Oscar Wilde
Megan McArdle is at it again.
She asks “Are the Rich Completely Undeserving of Sympathy?” and concludes that no, we should be empathetic to their plight. All while effectively demonstrating to me that, no, we really shouldn’t.
From McArdle’s piece:
“I believe that Elizabeth Warren has made this point–when people get into financial trouble, they often say, “Well, I didn’t take fancy vacations or go to restaurants all the time or buy 17 pairs of Jimmy Choos.” But (with the exception of some really compulsive spenders) this isn’t the stuff that gets people into trouble. It’s the big house with the stretch mortgage that you convinced yourself you had to have because it was in a good school district and you needed a yard and a bedroom apiece for the kids. It’s that brand new SUV (or Volvo station wagon) you persuaded yourself to buy because it was important to have a safe car. It’s the school activities or travel sports teams that cost thousands of dollars, which you let your kids start in ninth grade because you didn’t know that you’d have to break their hearts by pulling them out in their junior year. The divorce decree you signed because you didn’t realize your income was going to drop by a third.”
I don’t feel bad for very wealthy people who buy too much house or too much car or too much school for their kids. These people are well-educated. If they don’t understand finance themselves, they have access to planners and accountants to make sound financial decisions.
They should know better. Period.
They should be cognizant that they could lose a client or a bonus or a job. They have easy access to family planning, they are unlikely to be set back by medical problems because they have health insurance, they have retirement funds. The very wealthy should have no problem maintaining a reasonable lifestyle. They could live in smaller houses, take public transit, own fewer (and cheaper) cars, be more responsible about family planning, and shop at discount stores. In fact, they should. If you make $350,000 a year, you can live a very nice lifestyle on $200,000 and put $150,000 away for a rainy day.
McArdle makes this point for us when she cites houses, cars, kids, and divorces as the major reasons for the rich to run into financial problems. Yet the wealthy have the best resources to make smart decisions. So they’ve been given every opportunity, every tool, every resource to make responsible decisions. And when they don’t, we’re supposed to feel bad for them?