Isn’t it obvious that the rich will always get richer?

This cliched concept is one that popular media just loves. The "poor" people can dismiss any control that they have over their own circumstances and blame it on others, in this case, the "rich".

This cliched concept is one that popular media just loves. The “poor” people can dismiss any control that they have over their own circumstances and blame it on others, in this case, the “rich”.

I’m always bewildered by news stories about income inequality where they continually report that “the rich have become richer” as if this were surprising or something evil. It seems as if the media have a list of cliched statements/themes that they can continually roll out and get a reaction, and this seems to be one that gets a strong response from a large segment of the community every time.

What I don’t understand is how people don’t seem to grasp that the rich will just about always become richer. After all, they probably became rich by having a large excess of income over expenses, and if you just add more time since your last report then this excess cash has to increase their wealth, thereby making them richer in the eyes of the media.




That is unless the rich decide to forget all of their good habits that made them rich in the fist place, and become mega-hyper-consumers by pissing all of their money away like it’s going out of fashion. To do this they would probably need to spend it on other cliches that the media would like to report, for example:

  • Fancy sports cars – preferably the most expensive, fastest, shiniest and reddest ones that you can find. That way when they stand out, and ostentatious displays of wealth are how you can tell that someone is rich in the first place.

    Red sports cars and pretty girls - is this what rich people spend their money on? Popular media would like to think so!

    Red sports cars and pretty girls – is this what rich people spend their money on? Popular media would like to think so!

  • Private jets or first class airfares – surely rich people wouldn’t travel on the same planes with the “commoners”, or if they did then they would least separate themselves off from such undesirables by sitting up the front of plane instead?
  • Penthouses – because “rich” people only live on the top floor so that they are high above everyone else.
  • Prostitutes – because this is what journalists would spend their money on if they were rich?

Now these things are what the media like to associate with “rich” people such as highly paid athletes, but many financially independent people (not just people with high incomes) don’t actually spend money on this crap in the first place. Given that they are much less likely to make such ostentatious displays of “wealth”, it is unlikely that they would ever erode their hard-earned net asset positions through such frivolous spending decisions. The media won’t report that though because it doesn’t fit the cliches that they know will get them ratings.

Now this doesn’t affect me personally since I don’t buy into this crap, but I feel like there is a whole segment of the community that likes to hear this story, as if it makes them feel less responsible for their own position. It’s almost like they can say the system is rigged against them, and it’s all the fault of those “rich bastards”. I’m sure that a blog post like this wouldn’t change the mind of those people, but that doesn’t make it any less frustrating to know that people buy into this whole concept.

The poor have become poorer?

The poor are getting poorer. This type of narrative appeals to the popular media, and it is often presented as if it is a surprising outcome.

The poor are getting poorer. This type of narrative appeals to the popular media, and it is often presented as if it is a surprising outcome.

The flip side of “the rich get richer” is often true, in that the poor have become poorer since the last time the survey was completed. This is also reported as if it is a shocking and surprising fact, but if you think about it for a minute I can’t see why it would be a surprise given the widespread adoption of the following lifestyle choices:

  1. Spending more than you earn.
  2. Taking on huge amounts of debt.
  3. Buying “assets” that depreciate in value rather than increase in value.
  4. Not saving any money.
  5. Allowing their wants to inflate their lifestyle well beyond their needs, to the point where taking away their wants (which now seem like true needs) seems impossible.

Now of course the above lifestyle choices don’t explain why all “poor people” are poor, but they do explain why people that make these lifestyle choices face a declining or stagnant net worth position.

I would hazard a guess that many of the people who are outraged at the thrust of this whole “rich get richer, poor get poorer” topic would have made many (if not all) of the above lifestyle choices, and while these people might have incomes that are greater than those that are statistically poor, their low net worth positions would classify them as poor in my book.

So what is the point of this whole topic anyway?

It’s hard to say why this topic is even reported (it’s so obvious, you’d need to be missing a few screws to not know this already), because the reporting of this topic is more damaging than helpful in my opinion.

The reason it is damaging is that I feel like it makes people feel justified in taking no responsibility for their own position in life. If they swallow the whole theme without any rational thought, they can walk away thinking that their choices haven’t contributed to their financial position. Because “the system is stacked against them” there is no point in even trying to change things.

Given the above, the only reason I can think of for this topic to be reported is because it gets ratings. It’s not useful information to know (not unless the “poor” take action as a result, which they usually don’t), and I feel like it only helps stir up resentment from the have-nots, who often seem to lean a fair way to the left when it comes to political persuasions.

So what do you think about the rich getting richer? Is it as logical to you as it is to me that this will usually happen?

IA.

9 thoughts on “Isn’t it obvious that the rich will always get richer?

  1. Awesome piece – I think this a lot, especially when I’m around friends that earn more than me but have sod all to show for it unless you consider a shiny, too expensive-for-them-to-drive, sports car valuable…

    • Yeah, plenty of my peers at work are a bit like what you describe – they make good money but don’t have anywhere near enough to show for it. Obviously they have poor money habits, despite being finance “professionals”…

  2. I really recommend watching the series “The Men that Built America” on the History Channel (if ever aired again). You seem to be putting everyone we’d consider to be generally wealthy in the same group as the very rich. They are miles apart.

    • Thqnks, I will have a look at thw series if it ever comes back on TV. I appreciate that there are differences between the two labels that you use, but my post was more focussed on the things that they have in common compared to the “have nots”.

  3. This may or may not be relevant in Australia, but in the States the wealth gap remains very important and high-profile political issue.

    The fact that inflation-adjusted wages have been flat or lowered for most Americans while the very wealthy have seen huge gains in earnings is a big problem. That our increased efficiency and productivity has led to gains for one class of people and losses in another means that the trust between workers and corporate owners (crudely, the “poor” and the “rich”) is strained. Not to mention that the accumulation of capital in the hands of the few begets accumulation of power in the hands of the few, a power dynamic that feels antithetical to who we are “supposed to be” as a democratic nation.

    I think the action such journalism is supposed to lead to (ignoring for a moment the question of whether it is) is skepticism toward politicians and policies which do not systematically align with strengthening the economic positions of the lower classes. And I also think that’s no small thing.

    • Hi EC

      Thanks for your comment.

      The part that I struggle with here is that the “wealthy” business owners are expected to keep paying people to do things that can be streamlined/improved/done more efficiently by a machine/algorithm/new process, even though it makes no sense to do so. I understand the ethical point of view, but shouldn’t people that are being made obsolete do something positive to ensure that they remain/become relevant? Acting surprised or being distrustful doesn’t seem like a way of taking charge of the situation.

      Also, if we’re relying in political policies to address the issue, it seems to me as if this usually means that people want to penalise/tax/punish the “rich” as the solution. And perhaps that is reasonable in some respects, but all it would do is slow the trend in income inequality rather than reverse it.

      I genuinely believe that personal accountability is the only way out of an income inequality situation (it’s a capitalist system after all), but that can never be a popular viewpoint because the media seems to promote the idea of projecting ones own problems as being caused by someone else.

  4. Well since many of them have Millions now, they should get more so they could be worth as much as Billions down the road.

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