Obama: I Don't Hate the Millionaire Next Door

Posted by: Dan Beucke on December 7, 2011 at 4:00 PM

Here’s one way to interpret President Obama’s speech yesterday in Osawatomie, Kansas: It’s his attempt to tie together the loose-knit complaints of the 99% — against wealth accumulation by the 1%, job loss for everyone else, debt slavery, a free pass for banks, money corruption in Washington — into a single, unified theory of income inequality. And to convince the person who’s worth a million dollars that the wealth gap threatens them, too.

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Obama must do this if he intends to make this the theme of a winning 2012 re-election campaign. It’s one thing for people to march on those issues or occupy a park however briefly. Obama needs to weave them into a coherent narrative that holds up against charges by the other party that you want to seize the property of hard-working Americans and turn it over to their profligate neighbor.

One of the telling lines in the speech (which referenced Teddy Roosevelt’s 1910 progessive stemwinder in the same town) was when Obama made the distinction between those who have a million dollars and those who make a million dollars:

Look at the statistics. In the last few decades, the average income of the top 1 percent has gone up by more than 250 percent to $1.2 million per year. I’m not talking about millionaires, people who have a million dollars. I’m saying people who make a million dollars every single year. For the top one hundredth of 1 percent, the average income is now $27 million per year. The typical CEO who used to earn about 30 times more than his or her worker now earns 110 times more. And yet, over the last decade the incomes of most Americans have actually fallen by about 6 percent.

The difference? A lot of middle-class Americans have a million dollars — or used to — if you count their retirement accounts and home equity. If Obama’s inequality strategy is to work, he has to convince more of those people that he’s in their corner.

(Photos: Mandel Ngan/Hulton Archive/Getty Images)

Reader Comments

mr

December 7, 2011 6:44 PM

Obama is pathetic!just like J.Carter he will be a one term President. that is if GOP has a credible candidate like Romney. we shall see.

Dennis Madden

December 7, 2011 6:53 PM

The last few decades? How long is that? The Last Decade is 10 years and Obama has been president for 30% of that time. What has he done for us. Nothing but hire more overpaid government employees that we have to pay for. CEO's have raised their pay by 250% or decades and they now are in charge of corporations that are 500% larger then they were before. This President is a liar. He is over-payed and that is a fact.

John W.

December 7, 2011 7:23 PM

you know Obama doesn't get the American people everytime he says an issue is not about politics, it's "just math."

Andy P.

December 7, 2011 8:12 PM

You know people are trolling when they are trying to pin the economic mess on Obama.

Trickle down economics pointed the ship at the ice berg and GWB accelerated full force into it. 2008 was the product of voodoo economic policies that have been going on since Reagan.

In the years since serious financial regulation began (after the '29 crash) we didn't have another crash until the deregulation repubs (not the real republicans-fiscal conservatives against 'too big to fail' businesses; the ones who are would-be oligarchs) destroyed regulation.

Since '87 we've had 3 full-scale emergencies. In the years from '29 to '87 before Reaganomics could take hold? 0.

We've had a ton of growth, but it's only really profited the super-wealthy, which-if you read a history book-is not a great way to run a society.

And Dennis Madden's thinking is emblematic of the spin of the new GOP (I respect the old GOP): divide 'the last few decades' into the last decade and then give Obama blame for '30%' of that. The funny thing is, since Obama's been in power, the economy has grown. Not at a rate I think anyone would've liked... but it has grown.

Under (R) wonderboy (or the embodiment of 'Being There') George W. Bush, The Dow Jones actually LOST 2000 points. Since Obama has been president, it's gained basically 4000 points.

Any argument that we should go back to the policies of the neo-con oligarchs is patently stupid. It just shows the American appetite for polarized politics and willful ignorance that it's even considered.

Gus

December 7, 2011 8:20 PM

Those comments are pathetic, it is pretty obvious the companies (other than banks) are not growing 500% as an average (the economy barely grew as an average, how could the average be 5 freakin time bigger?).

Banks are parasites.

thirdroute

December 7, 2011 9:59 PM

Well said, Andy P.!

Yeah sure

December 7, 2011 10:28 PM

As an estate planning lawyer, I saw the results of the economic policies of the 1950's, 1960's and 1970's. Most people who were workers during that time have been able to retire with reasonable comfort. The generations that have moved into the workplace since 1980 are very poor by comparison. Most of them have nowhere near the savings their parents did, if they have any at all. The price of "Reaganomics" will be paid by all of us for decades to come but especially by the generation of senior citizens who will face old age with no savings, no pension and few public benefits. Will the republicans in Congress take care of the generation of impoverished 90-year-olds they are creating right now?

vince cole

December 7, 2011 11:15 PM

@ Andy P, How's the weather on Mars?

Margaret Trawick

December 7, 2011 11:25 PM

There is a HUGE difference between having a total of a million dollars, counting retirement accounts and home equity, and "earning", by hook or by crook, A MILLION DOLLARS PER YEAR. Too many people, including the author of this article, fail to see the significance of those two words.
If you have saved up the equivalent of a million dollars, including home equity (if your home hasn't dropped half its value in the last few years) and retirement pension (if you are lucky enough to have one of those) over a lifetime, you are not the kind of person Obama proposes to tax more. By today's standards, you are not rich. You are, as the man says, solidly middle class, and you are indeed threatened by the wealth inequality of this country - if you plan to live another thirty years, or if you have a bad or chronic illness, or if you have children to raise and put through college.
If you feel secure and contented, that's good. You will be happy not to have your taxes raised.
If you cannot or do not read, and you think Obama will raise your taxes and therefore you do not support him, ask anybody who does read. Ask the oerson who does your taxes for you. That person will set your mind at ease. I am sure you will not need convincing that you do not need more taxes, and maybe, unlike the author of this article, you will realize that Obama is on your side.

Bill L

December 7, 2011 11:25 PM

So I guess you have money under the mattress, Gus?

directory submission

December 8, 2011 12:39 AM

The millionaire next door not a millionaire by winning the lottery or Regis Philbin of new game show: millionaire. Most millionaire's in the United States are people just like you and me unless they invest their money on a regular basis and modest life. After interviewing of approximately 1000 millionaires, they discovered that the average millionaire $ 131,000 per year but up to 15 percent of their income on an annual basis invests. Most millionaires regular cars they bought for less than $ 25,000 used drive in modest houses living and working in a non-glamour industry. As a matter of fact his most millionaires entrepreneurs that themselves and their own small business work.


http://www.blurbpoint.com/directory-submission-service.php

MIke

December 8, 2011 1:39 PM

What makes since about our focusing on the narrative of this nation's wealth difference while the real issue in this election is about who will be the best leader,economic problem solver and who has the best method of job creation. Let us not be distracted, the president has a record now, that should be the campaign narrative. Retooling the nation's social and economic fabric takes generations not one term.

bgibrad

December 8, 2011 2:28 PM

Personally, I think you are all missing the point. The question is not whether folks are willing to pay more taxes. It is "what is my wasteful, profligate government going to use my dollars for?". There is no trust that this group of politicians will use our money wisely. We need a sea change in the way our dollars are redistributed. More taxes now just allows the entrenched lawmakers to continue waging their petty, two party battles without aiding the populace whatsoever. Taxpayers are fine with their dollars supporting better infrastructure, debt repayment and supporting those who strive to help themselves. Let my dollars help someone afford better education or job training via an apprenticeship program. But, don't let my dollars pay someone to sit on their front stoop for 30 years. So far, Washington is just using our money to buy votes via putting more people on the government payroll and on the government dole. Fix the stalemate in DC and show you can work together before asking for more of my money to perpetuate your pettiness.

John

December 8, 2011 2:32 PM

There is a huge amount of ignorance in America when it comes to the most basic economic terminology.
Debt
Deficit
Wealth
Income
Progressive tax
Regressive tax
flat tax
Even people with MBA's and college educated people fumble on these differences. Which begs the question: how can you have a meaningful discussion when you are speaking a foreign language. Then you have ignorance in basic math: proportionality, ratios, percentages of a percent. Amazing!!!

ashraf

December 8, 2011 4:09 PM

I think it is fare theat every one pay his taxes according to his income , Obama is right.

null

December 8, 2011 4:42 PM

How is Obama on any one's side. Here are the stock market crPanic of 1792 · Panic of 1796–1797

1801–1900 Panic of 1819 · Panic of 1837 · Panic of 1847 · Panic of 1857 · Black Friday (1869) · Panic of 1873 · Paris Bourse crash of 1882 · Panic of 1884 · Panic of 1893 · Panic of 1896

1901–2000 Panic of 1901 · Panic of 1907 · Depression of 1920–21 · Wall Street Crash of 1929 · Recession of 1937–1938 · 1973–1974 stock market crash · Silver Thursday (1980) · Souk Al-Manakh stock market crash (1982) · Japanese asset price bubble (1986–1991) · Black Monday (1987) · Friday the 13th mini-crash (1989) · Black Wednesday (1992) · Dot-com bubble (1995–2000) · 1997 Asian financial crisis · October 27, 1997 mini-crash · 1998 Russian financial crisis

2001–present Economic effects arising from the September 11 attacks (2001) · Stock market downturn of 2002 · Chinese stock bubble of 2007 · Late-2000s financial crisis · United States bear market of 2007–2009 · Dubai 2009 debt standstill · European sovereign debt crisis (2009–2011) · 2010 Flash Crash · August 2011 stock markets fall
ashes Everyone Needs some history lessons

R. Palmer

December 8, 2011 6:35 PM

I believe our President is doing a great job and his most recent speech is a good example. He is up against an intransigent Congress and Washington beltway crowd who only value special interests and lobbyists not the ordinary person. If I were lucky enough to make a million dollars a year I would gladly pay back in taxes what the rates were when Ike was president. He put in the Interstate Highway System and got us a good way toward going to the moon. I hope people in 2012 very carefully put new members of Congress in place who will work with our President instead of obstructing him at every turn. People like Grover Norquist should crawl back under whatever K-Street rock he came from. - R. Palmer Norman, OK

Economister

December 8, 2011 6:41 PM

I think that while Obama tried his best to unify the 99.9%, ultimately, he still turned it into a have vs have not conversation, which won't get him the kind of support that he needs.

You see, while most people don't make a million dollars, we all envy the millionaire lifestyle that is presented to us on TV or by whenever we see someone driving a Ferrari or land in a private jet--we would like to share in that prosperity, and there is nothing wrong with wanting it and with wanting to preserve it (if you already have it).

Income inequality isn't about the rich vs the rest-- it's actually about "being rich now versus being rich later."

Those in favor of tax cuts on the top 1%, who want to do away with social programs, who advocate for deregulation and supply-side economic policy, are really advocating the desire to be rich NOW. Those who apply demand-side economic policy, who advocate for social programs (especially education and social security), are expressing their desire to be rich LATER.

Well what's the difference between being rich NOW and being rich LATER?

The nominal amount of wealth now versus wealth later is smaller--we're willing to discount a certain percentage (say the amount a bank charges on interest or a t note pays) thats compounded over a period of time. Think about it--if you won a $250m lottery, you would probably want the money now (which would be given at a discount, say only $180m), rather than wait for the entire amount to be paid off. Am I making sense? Good.

Now, to tie this in-- since the money now is less than money later, the economic problem of scaricty becomes magnified, as there is less money now to be distributed--so those who are position to receive the most, demand the most, which leaves a smaller amount behind for the rest of us.

When we advocate being rich LATER, the whole society becomes richer (even if incomes for the wealthiest rise much faster, even the poor will see a rise in income). When we advocate being rich NOW, only we see an increase in incoem inequality, as in order for the rich to take more, the poor must take less.

Obama should hire me as his chief economist. :-D

Visit my blog-- corporus.net and maybe I'll become famous.

CJ

December 8, 2011 6:58 PM

@Andy No crashes between '29 and '87? You realize the great depression lasted until late into the 30's.. and that we have had recessions in every decade (except maybe the 50's) since. Were you speaking about a different country?

Anti Mr

December 8, 2011 8:30 PM

If Obama is pathetic, i don't think anyone can save United States. Wait for God.

barry

December 8, 2011 8:32 PM

the reason many "entrepreneurs" can become millionaires as opposed to the working stiff is the tax code. The guy running his own company gets to bend a lot more rules than the guy who takes home 50% of his wages after tax, fica, medicare, SS, insurance, etc

lm

December 8, 2011 9:06 PM

I dont think there is a specific administration to point blame. Its all been pure economics, right or wrong. The wave of globalization that has accelerated since the Clinton administration is mostly to blame here. Companies across the U.S. have out-sourced high paying manufacturing jobs to low cost producers, which have made these companies more competitive in the world markets and consequently have made those running these corporations wealthier. They've cut cost increased margins, profits and and their stock prices. Not by coincidence these same CEOs have the dominant share of their income derived from stock options and investment portfolios. The combination of all of these factors have contributed to the acceleration of wealth concentrated in the upper brackets. Simultaneously those once employed by some of these corporations are looking for work in other lower paying service jobs. There is NO turning back here unless the cost of doing business over seas increases to the point it no longer makes sense to out-source, or we create industries that our work force has a unique ability to perform and can be exported. That is why its imperative to encourage risk taking, incentivize banks to make loans and to encourage new and innovative industries. I am not convinced that income redistribution will work (i.e. tax the rich) gov't has never and will never be an efficient spender of cash. The rich at the very least invest, maybe we can encourage more private equity investments. But there is no magic solution and there is no turning back.

rene

December 8, 2011 10:42 PM

So now everybody expects to be rich in the USA?
people seem to forget their place in society, workers are expecting to buy cars houses holidays and any crap that wall mart comes up with during the Christmas season.
Workers are responsible for the loss of industry in the USA, they are the cause that factories can not compete on a global level.
Workers want higher pay and lower prices for the crap they buy and feel entitled to.

p denton

December 9, 2011 2:54 AM

Obama has much truth on his side the inequities in our society have become obscene.However,much of the public service is over paid and over benefited. Public servants have become public self servants.Although I do not agree with him totally the only Republican with credibility is Ron Paul.

David Nash

December 9, 2011 5:14 AM

Don't even mention Obama and TR in the same sentence. TR was a US loving president and never made apologies for our country. Obama is a socialist US hater.

Leon Trotsky

December 9, 2011 8:19 AM

Is this what we've become as a society? Arguing over who has how much, how they got it and whether or not they should give any of it up. There are millions of people who would dream of seeing a 6 figure salary, who work 12 hours days and can barely scrape by on the scraps tossed down from the narcissists at the top, who sit on an ever larger piece of the pie. This society is doomed to failure and revolution on its current course. People need to spend more time figuring out how to build a just and equitable society instead of focusing on how much they can get. And before you call me a dreamer and an idealist look at history. No society has ever survived when the majority of the resources were concentrated in the hands of a very few. Mark my words, Americas days are numbered if it stays on the the course its set over the past 30 years. The redistribution of wealth will come, either though a more equitable and just society or through the barrel of a gun.

rg wilson

December 9, 2011 8:31 AM

notice the picture above.....trying to make B. Hussien Obama look like Teddy Roosevelt? the picture of a man whose wife beats him like a red headed step child(obama) vs a man(pres t roosevelt).... come one bloomberg, he is the WORST president we have ever had..period end of discussion. imagine...a federal govt that loses money running monopolies(post office a d amtrak) and he wants the federal govt to run health care? the guy is book smart....no common sense and surrounded by socialists. as a former middle class person who has worked his way to upper middle class status..i say it is time for obama and team to head back to chicago and teach...do what you do best...not continue to work your hugo chavezian policies on hard working americans.

jordan

December 9, 2011 9:51 AM

The problem is, the solid middle class feels more threatened by profligate government spending, and refusal to cut any government programs except defense, than they are by "income inequality." The concerted effort to make "income inequality" the center of the debate has failed because Americans simply don't think that way, or vote that way. Except for the beltway media, normal people are talking about cutting the budget, not taking money out of individuals' pockets, sluicing it through government, and then handing it out to the favored groups.

One reason budget spending and cutting gained so much traction is that that is because people see massive, wasteful public spending and $15 trillion debt as the true threat, one that, ultimately, they and their children will be on the hook to pay back.

In other words, the fact that Obama targets the 1% right now for higher taxes reveals that he is capable of targeting any income level in such a way. "Just math" reveals that there aren't enough millionaires in the U.S. to cover this $15 trillion debt. Eventually, they will have to dip into the middle class: perhaps $400,000 and above, and when that proves insufficient, $125,000. And so on.

Obama did not present a budget plan for what he will cut or spend. He merely put a target on the "rich" and tells the rest of the population that's the enemy. But the middle class knows they are next on the chopping block.

The U.S. can and should maintain a robust safety net for the poor and needy. But a complaint of "income inequality" doesn't ensure the poor have their basic needs met. It only instills in people a sense of collectivist entitlement to other peoples' resources.

What's needed is debate over which government programs to cut or reduce, which Obama and other politicians refuse to talk about. But you can bet the voters are talking about it.

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About

"The Wealth Debate" is a running discussion of wealth, poverty, the economy and income inequality in the U.S. and the world. It was started shortly after the Occupy Wall Street movement sparked a global protest about the fallout from the financial crisis and money in politics. You can reach the editors, Dan Beucke and Mark Gimein, by email, or follow BloombergNow on Twitter to keep up with posts.

Analyses or commentary in this blog are the views of the author and or commentators, and do not necessarily reflect the views of Bloomberg News.

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