Rules for the Class War: Rule #1: It’s OK to be Rich

The potential seems to be ramping up daily.  A Pew study finds that 2/3 of Americans see a strong conflict between rich and poor. If there is going to be a “class war” I’d like to offer some rules so that it can be conducted in a peaceful and productive way.
 
Today’s post is about Rule #1:  It’s OK to be rich. 
 
But what do we really mean by “rich”?
 
As I’ve said before: 

The first concept everyone needs to understand and that the left forgets (or fails to acknowledge) is:  There is nothing wrong with being rich.  Everyone wants to be rich, and it doesn’t make you an evil, greedy bastard.  Being rich means you have achieved economic security.  We all want to have enough money to pay for all of life’s necessities and a reasonable amount of wants.  To have that amount of money and not have to work is the most common goal.  It is the apex of the American dream.

Now, what happens when someone acquires (notice I didn’t say “earns”) much, much more than that amount?  That’s where the seed of modern class warfare lies.  Past a certain point there is an ever increasing tendency for waste and the growing potential for evil.  Most of us are rightfully anxious about what those people can do with that “extra” amount of wealth.  The ability to maintain a comfortable lifestyle and have millions upon millions left over after gives the option to wield clearly more power than they can get from their vote alone. 
 
So Rule #1 is it is OK to be rich to a certain point, then above that point it depends on what you do with that “extra” money.  It is not the rich, but the “Crazy rich” that pose the greatest danger to whatever you believe is the greatness in America and the security of the entire world.  The choice faced by the extremely rich and the potential threat of the “Crazy Rich” will be explored in another post.  Today, Rule #1 is “It is OK to be rich,” so let’s try to define that.
 
Now everybody grab some pencil and paper and join me in a thought experiment:  How much money would it take for us to achieve this American dream?  People don’t take the time to figure out more specifically how much money would it take for them to consider themselves rich.  To find this dollar amount, instead of just picking a big number we should add up the costs of what we need or want to buy to maintain our chosen lifestyle if money was not an issue.  I think we’ll find that 1) the number may seem higher than we expected and 2) there are still many, many people that make many times that amount IN ONE YEAR.
 
I think it would be better to set the bar high and overestimate in our calculations to be sure that we land in a place beyond wants.  We’ll use three types of estimate: thrifty, free, or extreme.  The thrifty is minimum spending to be comfortable.  Think of it as what you get in a middle-class lifestyle, but without building debt.  Free is free spending, but not deliberately seeking to buy the most expensive of everything.  We’ll usually just average the thrifty and extreme figures to estimate for “free.”  Extreme would be the high end of everything.  Start with needs:  Food, clothing, shelter. 
 
Shelter:  The most expensive home recently sold in the U.S. went for $150 million.  That will be our extreme estimate.  Consider that the average home price in the most expensive zipcode is $4.3 million.  So $4.3 million should get you a great house in over 90% of the country. The national median is $162,500. 
 
So, for housing, thrifty will be triple the national median $486,000, free spending would be $4.3 million, and extreme would be $150 million.
 
Next up:  food.  The average meal in NY’s most expensive restaurants is $163.34.  So let’s take an estimate of 3 of those meals a day for the next 100 years for a family of six.  That comes to about $109.4 million.  On an average weekday I spend no more than $10 on food.  Three meals a day for the next 100 years for a family of six comes to about $2.232 million.  Food’s a tough one so let’s put the “free spending” estimate right in the middle at $56 million.
 
Clothing:  For the extreme example, average it out to buying a new $1,000 outfit every day for the next 100 years.  That comes out to $37.2 million.    I can’t bend my mind around me even spending $1,000 per month on clothes for 100 years.  I’ve become accustomed to using them more than once.  So for thrifty let’s go with $7.2 million.  Put free spending in the middle with $22.2 million.
 
So those are the estimates for the basic needs (shelter, food, clothing).  Another “need” is health care.  In 2009, the average cost of a family insurance plan was about $1,120 per month.   For 100 years that comes to $1.3 million, but we can expect health care costs to continue to rise, so let’s double that to $2.6 million.  That will serve as our thrifty estimate.  Let’s double that for a free spending plan ($5.2 million) and triple it for a luxury plan ($7.8 million).   
 
Now, we could keep going on and on forever finding more categories of what we could spend money on if money wasn’t an issue (We could find some figures to estimate what could be spent on cars, entertainment and travel, for example).  But for the purposes of trying to find a reasonable estimate of “rich,” let’s estimate the rest by doubling our figures for what we’ve come up with for the needs categories.
 
Being rich with a “thrifty” lifestyle amounts to $24.972 million; a “Free spending” lifestyle is $175.4 million; and an extreme lifestyle is $608 million.  What can we take away from those numbers? 
 
Under $25 million, you may have a lot of money, but in some individual cases there is still some work to be done before you’d have enough money to be set for life the way we understand the rich to be when they have achieved the American dream.
 
At $25 million and up, in the clear majority of cases you should be set for life.  Of course, at that level you still have to make good choices.  However, I won’t shed a tear for you if you end up paying an Eisenhower-era tax rate.
 
Above $608 million, you really have more than you can spend.  With that much, if you are still trying to get more, you’re probably a “Crazy Rich.”  Am a ready to ban the billionaire?  No.  Again, it all depends on what they do with it.
 
Below $25 million there is low risk that someone could become one of the “Crazy Rich.”  Between $25 million and $608 million, there is a moderate risk.  I could easily see some of these people choosing to live more modestly in order to have more cash to convert into power.  Above $608 million, there is a great risk of someone becoming one of the “Crazy Rich.” 
 
The lesson of Rule #1 is your moral standing as a rich person depends on what you do with your money.   It is counterproductive to demonize the entire class of folks labeled “rich.”  I don’t see it as a wise move to alienate good people who could otherwise be very powerful allies.  Although they are comfortably rich, they can be persuaded to see that they too face real danger from the whims of the “Crazy Rich,” who have taken up an extremely disproportionate share of the power in our post-Citizens United republic.
 
We’d be better off if the extremely wealthy just retired and lived the life of luxury, spending all of their money on stuff rather than trying to stuff the ballot box.  Unfortunately, there are a few bad apples that are working to undermine or even destroy American capitalism — although they claim it is their critics who are anti-capitalist — which leads directly into Class War Rule #2 — which is here.