Romney and the Real Wealth Gap

Original Article

The biggest challenge for Mitt Romney isn’t that America hates the rich; it’s that the public hates the undeserving rich, and deeply resents privileged punks and politically connected connivers who never performed constructive service to make their millions.

If the GOP contender convinces people that he amassed his fortune through hard work, building businesses and creating jobs, they’ll cheerfully forgive his vast wealth (just as they did with former Presidents Franklin D. Roosevelt and John F. Kennedy) and even accept the surprisingly low (but entirely legal) percentage he paid in federal <taxes as a quirk of our crazy system that he pledges to reform.

If, on the other hand, the impression solidifies that the former governor got ahead through shady dealing, political influence and inherited advantage, then he’ll find himself on the wrong side of the nation’s most significant class distinction: the crucial dividing line between those who earn their money honestly and admirably, and those who rely on special breaks and political manipulation.

These contrasting attitudes toward accumulated wealth shaped a January survey by Pew Research Center that asked respondents about the “strong conflicts” they perceived in American life. Two thirds cited the split between rich and poor — a bigger percentage than picked divisions between immigrants and native born, young and old, or black and white. Moreover, the percentage worried over the rich/poor gap has soared in the brief period of Barack Obama’s presidency, rising from 47 percent to 66 percent in just three years.

Embers of class warfare

This mounting perception of economic conflict obviously reflects high-profile rhetoric by the president and other Democrats who blame hardships of working Americans on the purported refusal of “millionaires and billionaires” to pay their fair share. In recent months, dedicated demonstrators of the Occupy movement have amplified these themes with their apocalyptic characterization of a nation dangerously split between all-powerful plutocrats (“the 1 percent”) and the hapless, hopeless masses (“the 99 percent”) purportedly subjugated to ruthless greed.

But while angry rants by protesters and politicos add to the impression of rising tensions, there’s scant evidence that the public feels ready to take sides in the supposed class warfare. Americans still believe that wealthy people usually deserve their advantages: The Pew study showed a solid 43 percent (unchanged in recent years) who agreed that the rich became wealthy “mainly because of their own hard work, ambition or education.” Meanwhile, a December Gallup Poll found a majority of Americans (52 percent) saying that “the fact that some people in the United States are rich and others are poor is an acceptable part of our economic system”; only a declining minority (45 percent) believes that such an economic gap “represents a problem that needs to be fixed.”

There is, in other words, no instinctive hostility toward privileged One-Percenters such as Romney. Americans seem to realize that nearly all the people they admire most — from Oprah Winfrey to the late Steve Jobs, from Billy Graham to Warren Buffett, from Tim Tebow to President Obama himself — have achieved great wealth on their way to great achievements. Academic analysis shows the two most common occupations listed on tax returns of the top 1 percent are “physician” and “executive at nonfinance firm.” Few Americans resent commercial success for those who heal the sick or promote economic growth by developing dynamic enterprises.

We do, however, look askance at those who game the system and get ahead through ripoffs, crony capitalism and governmental favoritism. In the same way that middle-class Americans feel more compassion for poor people seeking opportunity than those demanding entitlement — what we used to call the “deserving” vs. the “undeserving” poor — so, too, we express admiration only for the wealthy who merit their success.

Even the most celebrated progressives respected such distinctions. In the 1910 “New Nationalism” speech in Kansas frequently cited by Obama, former President Theodore Roosevelt emphasized selective sympathies. “When I say I want a square deal for the poor man, I do not mean that I want a square deal for the man who remains poor because he has not (got) the energy to work for himself,” the former president thundered.

Romney’s case

In this context, Romney, the former Massachusetts governor, will get a “square deal” from American voters if he proves a history of productive achievements through detailed accounting of his illustrious business career. He needs to provide more than platitudes about his record at Bain Capital, with unequivocal evidence that his success brought benefits far beyond his family circle. He should also explain that his combination of tax payments (he did cough up $3 million last year to the feds) and generous gifts to charities (another $3 million) amounted to paying more than his fair share —an estimated 42 percent, with state and local taxes included.

Even voters inclined to support Romney want him to address these challenges, not because they hate the rich but because they want evidence that confirms their impulse to admire them. Contrary to claims of Occupy agitators, the most important division in our society isn’t the gap between rich and poor. It’s the distinction at every income level between earned and unearned advantage or, to use old-fashioned language, between honorable effort and ill-gotten gains.

If the candidate scuttles toward the shady side of that gap, he can’t possibly win — but taking a clear, proud stand on the right and sunny side makes it unlikely he will fail.

Michael Medved

Senior Fellow, Center on Wealth & Poverty
Michael Medved is a nationally-broadcast talk radio host, podcaster and best-selling author. With an audience growing to 5 million weekly listeners, his daily three-hour current events and pop culture show has placed for two decades among the ten most important talk shows in the United States. His daily podcast, “In the Light of History,” available with his radio show (commercial-free) to a growing list of subscribers, provides historical context for the news and analysis he covers.