Monthly Archives: April 2008

Pedaling Downhill with the Wind II

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Reasonable people can and do disagree about class privilege and the degree to which we are an equal opportunity-based meritocracy.  I clearly stated my opinion in the previous post, but I want to remain open to differing perspectives that might deepen my thinking. 

The following examples of how the wealthy enjoy relative advantage range from lower-level subtle privileges to more dramatic obvious ones.  In and of themselves, the first handful of lower-level examples don’t provide much of an advantage, but they probably do in combination.

• Wealthy people can buy consumer goods in the “off season” on sale.

• Wealthy people can pay more to purchase higher quality goods that last longer even when adjusting for the higher original price.

• Wealthy people can buy consumer goods in bulk when they are on sale.

• Wealthy people can select higher health and auto insurance deductibles and thereby pay lower insurance premiums.

• Wealthy people can pay more in the short-term for “star-related” energy efficient appliances in order to save money in the long-run.

• Similarly, wealthy people can pay more in the short-term for a hybrid vehicle to save money in the long-run.

• Convenience credit card users, often receive money back on their purchases, thereby reducing their expenses (As a convenience credit card user, I receive 1.4% back on every purchase and therefore pay 98.6% of what most people do).

• Convenience credit card users avoid paying exorbitant interest fees.

• When purchasing a home, wealthy people can pay at least 20% of the total cost, and thereby avoid mortgage loan insurance.

• Wealthy people can afford the best accountants and thereby pay less in taxes.

• As noted in a previous comment by CK, wealthy parents can enroll their children in college admission test preparation courses.  Also, they can hire academic tutors, athletic coaches, and music instructors to help their children excel and get into the most selective colleges.

• Wealthy people sometimes receive annual financial gifts from other wealthy family or friends.

• People with wealthy parents don’t need to help out their elderly parents financially in their final years. 

• Wealthy people tend to benefit more from networks of other wealthy people.  Put differently, they have greater social capital.

• People with wealthy parents often receive large inheritances upon the death of their parents.

• The wealthy sometimes pay for their homes entirely and avoid mortgage interest altogether.

• The superwealthy, with substantial assets, earn considerable investment income, which they refer to as “multiple revenue streams”.

What’s my point of detailing these advantages all my multimillionaire readers want to know.  Am I simply fueling the flames of class envy?  Not at all.  Maybe ignorance is bliss, but I don’t think so.  I also don’t think guilt is particularly productive.  As someone who enjoys considerable class privilege, I think about it because it reminds me that “to whom much is given, much is required.”

Others, more radical than me, would call on privileged people like me to work towards greater equality in society by consciously giving up my privilege. 

They’d see my position—that’s it’s sufficient to be socially aware of the added responsibilities that come with privilege—as woefully inadequate.  I’m cool with that.

Another idea, and maybe the most important, is that privilege tends to reproduce itself from generation to generation.  Put differently, every family has momentum, either positive or negative.  There’s no standing still. 

Some people live alone, but no one is a complete island unto himself or herself. Most of us are part of family networks.  Individual members of family networks make daily decisions—whether or not to learn, work, save, invest, take care of themselves—that when taken together, lead overtime to relative advantage or disadvantage.

I’ve benefited from positive family momentum throughout my life.  And to extend the cycling metaphor, my daughters are beginning the bike rides of their young adult lives in the considerable draft created by the positive momentum of their grandparents, their mother, and possibly even their father.

The question is, how conscious of that are they?  Will each avoid the pitfall of privilege—a sense of entitlement—and instead develop a social conscience?  And as adults, will they act on their added responsibilities by contributing to a better world by doing socially redeeming work in some small corner of it?  

Pedaling Downhill with the Wind

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US citizens like to think of the US as a meritocracy meaning people’s success is a result of their initiative, ability, and work ethic as opposed to their family background, gender, or ethnicity. According to psychologists, people that think they control their own destiny have an internal locus of control. In contrast, skeptics who believe that institutional racism, sexism, and classism make it more difficult for people of color, women, and the poor to succeed have more of an external locus of control.

The meritocracy/internal locus of control crowd believes strongly that there is equal opportunity in the US. In their thinking, all the children born today in the US start “the race of life” with similar prospects.

The external locus of control crowd is skeptical that there is equal opportunity. They argue that all the children born in the US today begin the “race of life” with a staggered start. Those children whose mothers received excellent prenatal care, those that lucked into stable, well-educated, financially secure families begin life with a clear head start. Those children whose mothers didn’t receive quality prenatal care, those born into undereducated, poor, dysfunctional situations begin life several yards behind the starting line.

These contrasting orientations are ends on a continuum and most everyone’s locus of control falls somewhere in between completely internal or external.

Twenty years ago, Peggy Mcintosh, published a widely read and discussed essay titled “White Privilege: Unpacking the Invisible Knapsack.” A feminist Woman’s Studies professor, McIntosh wrote the essay after reflecting on how different her day-to-day experiences were compared to her African-American female colleagues. The bulk of her essay is a list of the specific ways she experiences privilege in her day-to-day life as a result of being white.

I can’t speak for Mcintosh, but I’m guessing she’d acknowledge we’ve made progress in race relations in the last twenty years, but at the same time, she’d argue many of her examples, are unfortunately, still relevant.

After using Mcintosh’s essay to prompt discussion in a class lately, I began thinking about the ways wealth contributes to privilege in American society. I believe the affluent enjoy several advantages over the less well-to-do, advantages that make it relatively easier for the wealthy to increase their wealth.

I do not believe life in the US is the level playing field my Republican conservative friends would have me believe it is. Rather, to use springtime metaphors, I believe the wealthy are pedaling downhill with the wind.

Does that mean self-discipline and initiative are irrelevant? Of course not. Also, there are always examples of extraordinarily resilient people who accomplish far more than one would expect given the circumstances of their childhood. We should reflect on and learn from these anomalies, but they don’t disprove my thesis. It’s important to distinguish between patterns and themes, and occasional, individual exceptions to those aggregate totals. Put differently, it’s important to think sociologically.

In the spirit of Mcintosh’s essay, I’ve started a list of specific ways the affluent are pedaling downhill with the wind. I’ll share those sometime soon.

For now, I have to highlight one glaring example from the Wall Street Journal website from a few weeks ago. And I quote:

“It is no longer enough to be a millionaire to enjoy the best perks on Wall Street. These days, one has to have at least $10 million to afford the best that retail brokerage firms can offer to clients.

Take the case of Smith Barney, which will cut bank deposit rates to some of its wealthy customers in June when the Citigroup Inc. unit rolls out a “tiering” rate system on bank deposits. After the change, mere millionaires won’t earn as high an interest rate on their deposits as investors with accounts of $10 million and up.

Clients with $1 million or more in assets at Smith Barney currently earn the highest interest rate on deposits in the program. In the new program, the interest rate they receive will be reduced; clients will need $10 million and up in their accounts to receive the premium rate.
The move is part of most Wall Street firms’ strategy to distinguish among different client segments and focus more on the richest of the rich.

Under the program, besides tiers at $10 million in assets and $1 million, other tiers are $500,000 to less than $1 million; $250,000 to under $500,000; $50,000 to less than $250,000; and those with less than $50,000 in assets.

An illustration based on Feb. 20 interest rates circulated to Smith Barney financial advisors indicates that those with $1 million to $10 million in assets will be most adversely hit. From previously receiving yields of 3.81% on their deposits (as of Feb. 20), their annual percentage yield would drop to 2.76, a fall of 27.5%.”

There you have it, relative advantage. Smith Barney definitely has the right to run it’s business any way it likes, but stories like this one, that I doubt many equal opportunity believing, internally-oriented readers take much time to deconstruct, make the notion of meritocracy a joke.

To assist readers in reading between the lines, I’d like to see the WSJ include a truth in advertising-type disclosure at the beginning of articles like the Smith Barney one. Here’s a possibility, “The following story makes any argument that the US is a meritocracy laughable.”

Smith Barney has me fired up enough to take it a step further. I hereby enlist any of you also moved by this example to help me identify potential recipients of the inaugural 2008 MBA—Meritocracy Bullshit Award, that I will hand out once there are enough nominations to choose from. And to any graphic artists out there that want to design the award, may I suggest a person riding their bike down hill with the wind at their back.

Until you light up the comment section with your recommendations, Smith Barney will remain the 2008 MBA leader in the clubhouse.

 

Passion

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I’m looking at the 4th tallest structure in Europe, the Berlin TV tower, which is 364m high.  The fam and I are at a Fulbright seminar and I spent our first morning trying to get online.  Of course I could have paid the exorbitant fee our hotel wanted, but that would run counter to stipend stretching.  I could post entirely about the last hour, but I think I’ll just hit yesterday’s highlights before retyping the planned post from laptop to internet cafe computer.  And as a sidenote, who gave the German’s permission to move the z and y on the keyboard?

Great Third Reich tour yesterday lead by two youngish American Fulbrighters based in Berlin.  We probably walked five miles in part because a huge half marathon had shut down the bus system.  Damn runners.  The tour was informative and memorable.  The 15 year old was particularly tuned in.  The 12 year old drifted in and out.  The 12 year was enthralled with a sidenote, the hotel where Michael Jackson dangled his baby from a window.  Several pictures were snapped.  Our room is on the 34th floor of a nice hotel with an amazing view in what used to be East Berlin.  Loved the bus rides in from the airport, very gritty sections of former East Berlin.

On to the planned post.  47 minutes of time left, so forgive the rough trans.

Isn’t passion in some form, or to some degree, integral to wellness?

At Lexington Junior High in Cypress, CA, I dreaded my 7th grade Spanish class.  I struggle with languages and the teacher was going through the motions.  The class started at something like 10:20 and ended at 11:10.  I explained to my hombres who were equally bored that our problem was the minute hand (pre digital) had to fight gravity to make its way from the bottom of the hour to the top.  Knowing that didn’t prevent us from endlessly staring at the classroom clock in the hope that someday it might miraculously skip forward.

One of the best barometers of passion is the opposite of my Spanish experience.  When passionately engaged with something, time loses relevance and seemingly stands still.  A few springs ago, A, J, and I stood standing in our family room watching in complete disbelief as L gardened right through dusk and into complete darkness.  Eventually, we gave up on her cooking dinner and turned on the outdoor lights for her.  When she came in dirty, exhausted, and completely contented, she said she hadn’t noticed the sun had set.

What activities give you the most joy?  When does time at least slow, if not stop?  How can we develop passions or maintain existing ones in our work-a-day world?  Do you enjoy camarderie with others who share your passions or are they solitary pursuits?  Are we doing everything we can to help young people develop socially redeeming passions?

These questions bubbled up a couple mornings ago after listening to the head coach of England’s national football team on BBC Radio.

In a tone so serious it’s impossible to exaggerate, he intoned: “Where have our great goal scorers gone?!!!  What are we doing to develop the next generation of great goal scorers?!!!  I had just come to and was semi-conscience so I searched for the transcript online to see if I was imagining things.  While looking for the transcript, I stumbled upon Nick Webster’s blog, which convinced me I had heard correctly.  Here’s an excerpt from one of his recent posts:

“So where are the English strikers and will they ever come back?

With a sick feeling in my stomach, I’m afraid to say that until a major shift in attitudes and social conditions occurs, we’ll not see an Englishman top the scoring charts for at least another decade.  I have three reasons for my pessimism.  Firstly, a lack of street football.  Secondly, a lack of poverty.  Lastly, too much time in front of the TV and video games.  All three reasons are related.

When, I was a kid, we’d play in the streets for hours on end.  In fact, in summer it wasn’t uncommon to have matches that lasted eight hours or more as children came and went.

The score wasn’t that important but scoring always was.  I can still recall great goals from my childhood-from swerving thirty-yarders that Petr Cech would’ve struggled to stop to mazy dribbles that would have Diego Maradona (circa 1986) drooling.

It was in the street that you would try the outrageous finish because it didn’t matter if you missed-you had another seven hours to make amends.

Although I wasn’t from a poor family, there still wasn’t a great deal of money for extra stuff.  The movies were a luxury, malls were non-existent and ice/roller skating was for rich kids.  Football was all I had-and rest assured I’ve played my fair share of games with balls that wouldn’t must FIFA inspection.  The hunger of poverty has often been cited as a major factor in producing the two greatest players in the world, Pele & Maradona-scorers of ridiculous goals.”

Even though I didn’t grow up playing the “beautiful game” and haven’t fully embraced it despite being a soccer dad for the last decade, I want to meet the Nickster because I love his passion.  Forget economic malaise, global warming, the threat of terrorism, poverty, education reform; dammit we need some goal scorers.

Given the Nickster’s logic, maybe Gordon Brown should do everything in his powers to accelerate England’s economic downturn in the hope that a world-class English striker or two might rise from the ashes.  Were that to happen, I’m guessing the Nickster and his football-mad friends might just accept the trade-offs and re-elect Brown. 

L’s life is enriched by gardening, the Nickster’s by football, and yours?

(apologies for the typos, it’s the Germans fault)