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On Wealth

1. Are you upset because your salary can’t meet inflation, or by the fact that your savings draw little interest? How content are the millions of Americans who live on the pittance called Social Security? Well, it appears that you’re better off being rich and able to participate in a hedge fund. These private, lightly regulated, and often secretive investment funds are available largely to wealthy and institutional investors. They specialize in complex investment strategies and have total assets of about $1.9 trillion, up from $490 billion in 2000. In 2007, hedge funds gained 10.5%, and this year are ahead of the market, dropping just 1.7%. Gregory Zuckerman writes in the Wall Street Journal, “The most successful fund managers enjoy celebrity-billionaire status, even as regular investors struggle to figure out what they are up to.” Still, uncertainty and turmoil plague this esoteric environment. Borrowed money is often used by investors, and some of that is drying up. Others fear that the hedge funds may be overstating their returns. Several hedge funds have fallen on hard times. To paraphrase Isaiah 57:20-21: There seems to be no rest for the wealthy investors. A worthy query: Is there no goal in life higher than being a celebrity-billionaire?

2. Cardinal Joseph Ratzinger, now Pope Benedict XVI, wrote in Journey Toward Easter (1987), “We know that the earth has sufficient riches to satisfy all, we are not lacking in material goods; we lack the spiritual strength which could create a world of justice and peace.” That is to say, that in his judgment world strife and hunger are basically religious and moral issues. Is that true? Does the incredible misery that haunts most of Africa, for example, reflect a spiritual crisis? We know much about corrupt and brutal governments that exist throughout the continent. And much of the warfare, especially the tribal slaughters, make little sense to most people. As for war in general, what about the spiritual nature of the conflict between the West and Islam? In short, the spiritual dimension raised by Cardinal Ratzinger needs to be seriously addressed. But by whom? Economists? Politicians? Journalists? The United Nations? Aren’t these largely secular sources of knowledge and power the least likely to ponder matters of faith and morality with adequate depth? And what wealthy nation anywhere on the globe would take theologians seriously?

3. A provocative quotation from the same Ratzinger book: “…economic development without spiritual development is destroying humankind and the world.” Really? It seems to this historian that the evidence is both abundant and obvious.

4. How wealthy are we? In 2007, North American retail TV sales were $31.9 billion. At the end of last year, about 56 million, or 42%, of U.S. households had at least one flat-screen television set. In sharp contrast, a middle aged woman I help (through a Catholic agency) in Liberia sells cold water and juice on a street corner in a desperate attempt to make enough money to feed herself.

5. Those of us who grew up in the working class will never fully understand the alienation of people born wealthy. It’s quite common to encounter the affluent who reject the very economic and political freedoms that have provided them with their life-long luxuries. Beautiful places such as Santa Barbara, San Francisco, Santa Fe, Cambridge, and the entire state of Vermont are filled with the privileged who despise their own country and everything it stands for. Today, a large number of luminaries in the Democratic Party fit the description. They graduate from elite schools, float between their mansions in exclusive neighborhoods, belong to private clubs, own limousines and yachts, travel the globe, and spend their time howling about the alleged injustices of American life. Such a man is Jamie Johnson, heir to the Johnson & Johnson fortune. For all of his millions and top connections in New York, his claim to fame is that he makes movies condemning the upper class. The Wall Street Journal did an article on him recently, calling him the rich man’s Michael Moore. Johnson told a reporter, “We have an aristocracy in this country that has convinced everybody else that they don’t exist.” A constructive suggestion: Mr. Johnson, give away your fortune to the poor, live in a 900 square foot house in Trenton, Oshkosh, Texarkana, or Dubuque, work at least eight hours a day, pay all your bills and taxes, send your children to a public school and an open admissions college, and then, and only then, tell me about your feelings of injustice. It’s the hypocrisy, not the privilege, that rankles.

6. George Anders in the Wall Street Journal: “Executive pay has been climbing at rates as high as 13% a year, far outstripping general productivity or economic growth.” Which is how much great personal wealth has been generated in this country in recent years. Many corporations are fighting to stop probes into these soaring incomes by stockholders, the so-called “say on pay” principle. Isn’t this a moral as well as economic issue?

Posted on Thursday, March 13, 2008 at 9:13 AM | Comments (0) | Return

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