In Defense of the 1%

by iam1percent on February 22, 2012 · 38 comments

One of the reasons I started this blog was because of the negative attention that is currently “occupying” (pun intended)our media outlets.  With the presidential election occurring this year, I presume the noise level will only increase over the next several months.  My hope is that those who read this blog get a deeper understanding of a majority of the 1% and realize that the problem is not with the 1%.  It’s not with the 99%.  It’s with our government and reckless spending.

Perceptions like this one really get under my skin.  In it, the author is stating his case on why he will be joining the 1% in obvious satire and in a patronizing manner.  I recommend reading the entire article, but I wanted to highlight a few flaws in his perception:

“The One Percent have fun. They have jobs and money.  Or just money, because when you have a lot of money, you don’t need to work.”

“Bought toxic, mortgage-backed derivatives? Don’t worry, your government will bail you out if you’re in the One Percent.  Bought a toxic mortgage? It’s your “responsibility,” if you’re in the 99 Percent.”

“The One Percent don’t have school loans or credit card debt. When they get into financial trouble, they get bailed out by the Big Government they claim to hate.”

Those familiar with my story, know that none of this is true in my case.  Is there some validity and truth to the article?  Sure, but it applies to the ultra wealthy and those in wall street.  Mathematically speaking,  likely the 0.1%, and those that are in banking/finance, and politics….probably a few hundred to thousand people.  My goal and wish is that we don’t get lumped into this group and that the 99% not paint with a broad brush.

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{ 37 comments… read them below or add one }

Bryan February 22, 2012 at 4:52 pm

Wow, that article you brought it is so slanted it is sad, but it does fall in line with what the media is putting out. Sad that we have fallen so far from working hard for what we want compared to my hand is out, someone fill it.
Thanks for pointing this article out.
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Jana @ Daily Money Shot February 22, 2012 at 5:26 pm

I don’t even know how to respond to that article. I don’t identify with either the 1% of the 99% but that article was incredibly offensive. And wrong. As you point out, there’s only a small fraction of people who that description applies to, which, if you watch the news, you would never know.

What frustrates me is that even if a 99%-er would read your story, he would not see that you worked to get to where you are and that it wasn’t handed to you on a platter. He would only see that you’ve arrived.

For the record, I identify with neither side. I think both sides make some valid points but neither is entirely right.
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Dollar D @ The Dollar Disciple February 22, 2012 at 5:56 pm

There’s a lot of hype and misinformation being slung around when it comes to the 1%. I think a lot of it comes down the jealous, really.

America both loves and hates the rich. We love them because we all want to be rich and we hate them because the media vilifies them and makes us think that they somehow cheated their way into fortune.
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StackingCash February 22, 2012 at 6:22 pm

Hmm. Your income is great, but I do not consider you to be a 1%. I consider those who have net worth over 100 million to be a 1%. I believe the 99% have issues with those who have more money than they need yet want more at the expense of others. I don’t have exact facts but as much money as Apple has, why does it have labor issues in China. Also, CEO’s and their cronies get bonuses for slashing labor costs and exporting jobs out of the country, how is that good for the 99%? Also, how generous is your company? I would think to be able to pay you your fat salary your company must rape and pillage Medicare. Sorry if that might have offended you but I’m in an ornery mood right now regarding the 1%.

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iam1percent February 22, 2012 at 8:24 pm

I appreciate your feedback, I have a different perspective on the economy. I don’t believe the economy is a fixed pie. In other words, I don’t believe that someone’s success is at the expense of others. I truly believe we all have the ability to be successful.

Put it this way…what if there was a village whose farmers could not meet the demands of the villiage and as a result, the price of food was high and people went hungry. What if 1 of the farmers develops a new process that increases crop yields, sells it to the other farmers, and becomes a millionaire because of it? Who is worse off in this situation? The farmer who invented the process? The other farmers who can now sell more crops? The villagers who can now afford food?

Pharmaceutical companies discover and sell drugs because it saves lives. Do you think it would be cheaper for Medicare to pay for a triple bypass or to pay for a cholesterol lowering drug? Who’s raping Medicare now?

What you need to realize is that the economy is not a fixed pie. If you want more pie, go bake some.
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StackingCash February 22, 2012 at 9:49 pm

You do not believe that someone’s success can be from the expense of others? I do believe you are out of touch and live in la la land of the 1 percent then. The 99% are just lazy welfare people and feel entitled to your money. I know many who work hard and even have multiple jobs yet still cannot crack a 50k yearly salary. If it only was as simple as baking pie as you say. I’ll stop here because I feel like a troll now, again sorry :/ but this is how I see it.

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iam1percent February 23, 2012 at 2:47 am

Its not that I don’t BELIEVE that someone’s success is at the expense of other…I KNOW that someone’s success is not at the expense of others. I see how you conveniently avoided the village scenario, which ultimately makes my point, and is representative of all goods and services in America. All goods and services fill a need, reduce costs, and/or create value…but you can continue to ignore that fact.

Regarding your example of the person with multiple jobs who can’t crack 50k. Not every job deserves a high salary. There are jobs in high demand and jobs in low demand. Some pay higher and some pay lower If he can’t break 50k, he needs a new job. IF he can’t get a new job, then he needs to live within his means and be content with what he has or he needs career advice from http://www.iwillteachyoutoberich.com.
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StackingCash February 23, 2012 at 4:10 pm

Your example of the village is a nice clean example. You are the one ignoring the fact that there are industries that exploit people to make a buck. I can see that is how you keep a clear concious and understand you rather not see the ugly side of economics. :)

Money Infant February 23, 2012 at 8:36 am

“Pharmaceutical companies discover and sell drugs because it saves lives”

I disagree mildly with this statement. Pharmaceutical companies only research, discover and sell drugs that are profitable for them. That’s a very different motivation from saving lives. Saving lives is just a convenient side effect of the profit generating aspect of the business.
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iam1percent February 23, 2012 at 1:12 pm

I can agree with that…in as much as Apple only creates products that are profitable for them and the advancement of technology is just a side effect….and that Facebook only creates the social network platform because its profitable for them and that connecting people is just a side effect.

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PB February 22, 2012 at 9:10 pm

whether or not the author is 1% based on net worth (I believe he may not be, since from what I can figure from a quick google search the figures teh entry to the top 1% of net worth ranges from $1.2 to 1$1.5 million), your number for the cutoff for the 1% based on networth is rediculously high.
In addition, the author does, based on the easier to track 1% of income earners, fall into the 1% of income earners.
Your post seems to illustrate part of the problem that lead to the post cited to- many people think of the uberrich as the 1%, when in reality, the top 1% includes many people much closer to you and who don’t have tons of money to throw around, and didn’t accumulate their money at the expense of others. It also seems to miss the point of this blog.
For example, my mother’s net worth falls within the 1% mark (using the low end) but you would never know it. She is a high school chemistry teacher and reached a high networth through saving, watching her spending, investing wisely, and unfortunetly, through some life insurance money when my father (a professor) passed away.

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StackingCash February 22, 2012 at 9:56 pm

1.5 million net worth is the 1%? Guess I’m way off then.

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iam1percent February 23, 2012 at 2:48 am

PB, I completely agree….stacking cash missed the point of this blog.
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so February 22, 2012 at 8:49 pm

That article is foolish. I’m in the same boat with Jana. I don’t identify strongly with either, and have been both, but I’m strongly anti-idiot and so this article offends.

That being said, I don’t understand why the media perception bothers you so much. You’re a self-proclaimed optimist, have over a million bucks, a monster income, a doctor wife, nice kids, luxury cars, beautiful home, etc…why do you care? No one is impugning your work ethic or begrudging your success…

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iam1percent February 23, 2012 at 2:09 am

SO, first of all, thank you for your continued engagement on the blog. Even though we don’t see eye to eye, I appreciate your opinion. That said, the reason this stuff bothers me is that these people have power in their vote..and they end up voting for someone who will escalate the class warfare rhetoric and ultimately change policy based on class. That’s why it bothers me.

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so February 23, 2012 at 4:17 pm

No problem — I think we just dispute the scope, strength and competence of the government, which is hardly uncommon today.

To the substance of your reply, it’s your right to advocate as you see fit to change those perceptions, for sure. I guess I just wonder what you think the media should say, as there has been ample coverage, even in the usual MSM outlets, of the general diversity of the 1%.

I also think your defense is a little over-general — your village metaphor, for instance, doesn’t really extend to financiers, which are the primary targets of Occupy movements, when they can be bothered to recall what they are protesting about — and I think that most of the 1% are strongly politically engaged and able to advocate for themselves, don’t you?

I’d like to see more “Ramsey Step 7″ – style personal finance for 1%ers (well, full disclosure, we were in the 3% this year for income, which was a bummer, wife quit a job) like me and less politics, but your blog certainly has great potential!

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iam1percent February 23, 2012 at 5:38 pm

I don’t think the MOST of the 1% are strongly politically engaged. I think a small minority are, but a vast majority aren’t. Regarding the villiage metaphor, what is the issue with financiers? If a financier was involved in providing a loan to the farmer so that he can develop the technology, then he also wins in the scenario. Again, I ask…who loses?

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so February 23, 2012 at 6:13 pm

The Economist (via Gallup) says different, and I’m inclined to agree: http://www.economist.com/node/21543178.

I think my issue isn’t per se with traditional bankers (financiers is the wrong word, my bad), it’s where investment bankers and corporate lawyers (full disclosure: I am one) make more than CEOs, who employ more people and actually produce products and services.
I have trouble with eight-figure salaries for individuals who simply provide transactional brokerage services, I just don’t think the value is commensurate with the compensation provided.

I feel the same about CEO severance packages (again, full disclosure: I often negotiate these on both sides) which provide huge payouts upon separation: it’s a reward for failure, and, thus, the compensation does not reflect value provided.

Do these folks work hard and deserve a good, well-above average living? Sure, absolutely, they went to school, worked hard, so on and so forth. Should they be paid tens of millions for drafting merger documents, when every merger is 95% the same? …I don’t know, but it’s hard for me to find eight-figures worth of value in that equation.

Julie @ Freedom 48 February 23, 2012 at 1:55 am

The gall it takes to make such assumptions about the 1% is unbelievable. And they wonder why THEY can’t get anywhere in life. Take responsibility, give your head a shake and make it happen. Stackingcash is bang on – if you want a bigger slice of the pie – go bake some!
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iam1percent February 23, 2012 at 2:49 am

Thanks for your comment, Julie. Stackingcash actually thought the pie was fixed…
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Money Infant February 23, 2012 at 8:43 am

Sadly I don’t care much for pie. However I do enjoy a nice scone or muffin from time to time :)
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iam1percent February 23, 2012 at 1:13 pm

HA! I’m not sure how to respond to that!

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Edward Antrobus February 23, 2012 at 4:23 pm

I guess “top 1%” is a loaded term, because we aren’t talking about the top 1% of what. People in these comments seem to be referring to net worth. I always thought it referred to income. And of course, it is also only referring to the US. I forget the exact numbers, but I think the $53k we made last year puts us in at least the top 10% of all income earners worldwide, while it merely discribes lower middle class in the US.

But I do have a friend that is now in the top 1% of income earners in the US. It happened when he got promoted at the beginning of the year. But he still has a lot of debt. Student loans that he wasn’t dilligent in paying off when he was younger, a new mortgage in an expensive part of the country, and loads of credit-card debt that he racked up before he dealt with his gambling addiction.

Add in the fact that he’s been burned a couple times in the past, job-wise, and even though he makes 6x as much as I do, he’s more worried about money than I am.
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PB February 24, 2012 at 1:23 am

I agee that the 1% is a loaded term. I actually think that the fact different people art thinking about, and defining, the 1% in different ways is one of the many reasons discussion sourrounding “the 1%” are so hard. In my previous response I pointed out the net worth cutoff becuase the poster I responded appear to rely on that- with a cutoff not in line with reality.
Most people think of the 1% as millionaries and billionaries and that simply isn’t necessarily true. Your friend is a perfect example. He be in the 1% of income earners, but his net worth may be much less than someone earning close to the mediam income.

I have to keep reminding myself that I personally have a perception problem. My househould (my husband and I) fall safely within the top 1% of earners. However, this is a relatively new phenomenom. That, coupled with how we spend money and my preconcieved notions of what being in the 1% should mean makes it very hard for me to remember that we are so much better off than the vast majority of Americans, despite the large amount of student loan debt we still have (but could pay off, and most likely will shortly).

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JT February 24, 2012 at 2:48 pm

I am a 99% percenter affected tremendously by Dodd-Frank regulations adorned by the 99% who don’t particularly care who they hurt, so long as the victim of regulation is in finance, or is in some way related to finance.

I would guess a majority of the people wishing for more regulation on Wall Street (that’s such a joke, anyway) would change their mind if it were to affect their bottom line. There’s nothing like a movement that blindly accepts whatever law of the day so long as its written under the guise of regulating the financial industry. Likewise, there’s nothing like watching a movement on TV that is determined to make your job illegal.

Feels good to be part of the 99% affected by laws that were supposed to help protect the 99% from the 1%, let me tell you.
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Monica February 24, 2012 at 3:58 pm

Hello fellow Yakezie Challenge member! I love the debate that you have inspired through the articles on your blog. A college degree doesn’t guarantee you a job or make you intelligent, but is it helpful to have – yes. If you have marketable skills or vocational skills and no degree you can be successful too. It comes down to the choices we make, the goals we want to accomplish, learning from our mistakes, and the amount of work we want to put in to making our life the way we want it to be, and it’s not the same for everyone. Resentment of people who are further along in life or have more money is wasteful, use that energy to change your life and make it better, and don’t complain because they did the hard work to get there.
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iam1percent February 24, 2012 at 5:16 pm

Monica, I couldn’t have said it better myself. You and I are on the same wavelength!

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so February 24, 2012 at 6:07 pm

Shoot, *finance* is barely part of the free market, with their reliance on the deposit window and reliance on other government money.

In any event, I didn’t mean for my analogy to swallow the point, which is that you assume everybody who gets paid in the private sector (at least in finance) adds value, or they wouldn’t be getting paid? That’s just crazy talk.

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iam1percent February 24, 2012 at 6:49 pm

I didn’t agree with the government bailouts, but assuming that didn’t happen, someone is paying for the finance services which means it adds that much value to someone. Why else would someone pay for a financial service if it didn’t add value to them??

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iam1percent February 23, 2012 at 5:35 pm

Do you have specific examples of this where someone does not have the freedom to leave?

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StackingCash February 23, 2012 at 7:27 pm

Foxconn workers in China? Extreme example. I’ve thought about this more and more and I am beginning to see your point. Most of the poor are either mentally ill and/or have health issues from allowing them to work. Many are just plain lazy and/or stupid. Sucks to be them.

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iam1percent February 23, 2012 at 9:00 pm

So you pull an example from China? How do you envision the US to regulate Chinese workers if they don’t have child-labor laws, OSHA, overtime laws, etc? At least give an example of exploitation in the US.

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iam1percent February 23, 2012 at 9:02 pm

“I don’t know, but it’s hard for me to find eight-figures worth of value in that equation.”….I agree…I’m not in finance so I don’t get it, but they must product value to someone if someone is willing to pay for it.

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so February 24, 2012 at 5:09 pm

“I’m not in finance so I don’t get it, but they must product value to someone if someone is willing to pay for it.”

That’s a huge assumption to make! By way of analogy, government bureaucrats get paid: do they inherently produce value equivalent to their compensation simply by virtue of that fact?

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Tony February 27, 2012 at 8:26 pm

Actually these chinese workers are working indirectly for Apple. So it’s easy, if you buy Apple products you are encouraging these slave camps in China.

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iam1percent February 24, 2012 at 5:18 pm

Government is not part of the free market. They don’t generate revenue by adding value. They generate revenue by compulsion and at the barrel of a gun…not a free market…

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iam1percent February 28, 2012 at 3:16 pm

I agree…I don’t own Apple products.

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