The basic lack of understanding between the 99% and the 1% is about money. For most of us money is what we use to pay the rent or mortgage, go to a movie, pay for health insurance, buy gas for the car. It’s function is simple, and if we have enough to do the daily things we need to do, and reasonable expectation that there will be enough to send the kids to college and ease our retirement than that takes care of it for us.
But that is not true for at least one category of the 1%. And yes, it makes sense to make this distinction. One subgroup of that population is the inventor/developer/ entrepreneur. That group brings something tangible and functional into the world: the computers, the internet connections, the franchise food outlets etc. We buy what they produce for a variety of reasons clustered around making our lives simpler and more efficient and more fun. Money for that group is what enables them to get their ideas into physical reality and into the hands of consumers. Think Steve Jobs, Bill Gates, and the gentleman who developed Costco.
The next sub-group are focused on understanding which of these creations will sell at a profit, what the next big thing is, or what the under valued old thing is. And how will other investors value it? Will Coke maintain it’s dominance, will this builder choose the right design and location for an emerging market, and how long will this run up on commodities last before it’s time to move onto to something else. Where does it make sense to invest; not speculate, but invest. Think Warren Buffet, and George Soros.
The final group is the one that is so difficult for the rest of us to understand; they are nameless to me and to most of the main street crowd, because the only thing they make is money, and they are the ones who value it very differently from the rest of us. They do not create functional things that we can buy, they do not invest in companies to help them grow and develop their ideas into things we can use. They are concentrated on developing complex monetary trading strategies that almost no one really understands or can explain. They are the financiers, the hedge fund gurus that figured out how to hide worthless risky loans into buyable bundles with false promises of making more money. For them, money is what they need to make more money. That’s why any threat of tax increases threaten them almost at the level of identity loss.
Why? Because all their thoughts about money have to do with the ability to leverage a small percentage into a large profit. So when you take an extra 5% from them in taxes, they experience it as taking away the opportunity to make 20 or 30 times that amount. In their reasoning money is the opportunity to make more money. They must experience that threat in the same way a carpenter would when you told him that all you wanted to take from him is his hammer, and maybe a few of his nails.
That is why there is this failure to understand. Until we do understand the relationship of this group to it’s magical lever, to it’s tools for creating large personal wealth, not jobs, but personal wealth, they will use what money they have to in order to protect the rest of their resources, and the rest of their opportunities. Only rarely has an aristocracy willingly yielded it’s privilege and position, it’s manors and carriages, it’s hold on power and it’s claim to it’s own future. The revolution this aristocracy fears is the revolution of regulation, and they will call it any name they can think of, and fight it with everything they have.