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Op-Ed

What's so awful about the 1%?

Occupy Wall Street has said it's the 99% of 'us' against the 1% of 'them.' But many of 'them' started out like 'us' and have brought us great innovations that we embrace.

December 04, 2011|Bradley Schiller | Bradley Schiller is a professor of economics at the University of Nevada-Reno and the author of "The Economy Today."

The class war is on. It's the 99% of "us" versus the 1% of "them."

In the rhetoric of this war, we are fighting the 1% because they possess most of the nation's wealth, bankroll their handpicked political candidates, control the banks and get million-dollar paychecks and billion-dollar bailouts; yet they don't pay enough taxes or invest their wealth in creating American jobs. They're the "millionaires and billionaires" President Obama has called out as needing to pony up more for progressive reforms of our healthcare, banking, tax and political systems. They are the enemy of "us" -- the 99% who toil at low-wage jobs, hold underwater mortgages, face foreclosures, suffer recurrent and protracted job layoffs and plant closings, and yet pay our fair share of taxes.

But there's a flaw in this strategy. The Occupy Wall Street movement envisions the 1% as a monolithic cadre of entrenched billionaires who have a firm and self-serving grip on all the levers of the economy. But a closer look at that elite group reveals how untrue that perspective is.

Forbes magazine compiles a list of the richest 400 Americans every year. To get on that list, you must have at least $1 billion of wealth. They are the creme de la creme of the 1% -- indeed, the top 0.0000013% (!) of Americans. So who are these dastardly people?

For The Record
Los Angeles Times Wednesday, December 07, 2011 Home Edition Main News Part A Page 21 Editorial Desk 1 inches; 25 words Type of Material: Correction
The 1%: Some versions of Bradley Schiller's Dec. 4 Op-Ed headlined "What's so awful about the 1%?" misidentified Facebook founder Mark Zuckerberg as Mark Zuckerman.

The late Steve Jobs was in that elite club this year. In his earlier days, Jobs would have been camped out with the OWS crowd, probably passing around a joint. Should we count him as one of "us" or one of "them"? (And you can't use your iPhone or iPad to vote "them.")

Then there's 27-year old Mark Zuckerberg (No. 14 on the Forbes list), whose Facebook innovation enables the OWS movement to communicate so easily. He and five other Facebook entrepreneurs just joined the Forbes 400 this year.

We'd also quickly recognize among "them" Sergey Brin, Larry Page and Eric Schmidt, who became billionaires developing Google. And, as they are sipping a latte to keep warm, the OWS campers should also reflect on whether Howard Schultz, Starbucks' founder and No. 330 on the Forbes list, is with "us" or "them."

Not every member of the Forbes 400 is a high-tech folk hero. There is a lot of inherited wealth on that list too (the Mars, Walton, Cargill and Ford dynasties). But 70% of the Forbes elite are self-made billionaires. Those entrepreneurial successes include not just the names behind Facebook, Google, Apple and Starbucks but also EBay (Meg Whitman, Pierre Omidyar), Yahoo (Jerry Yang), Nike (Phil Knight), AOL (Steve Case), Amazon (Jeff Bezos), Subway sandwiches (Peter Buck, Fred DeLuca), "Star Wars" (George Lucas) and even Beanie Babies (Ty Warner). Does anyone doubt that these members of the reviled 1% have enriched the country in significant ways?

Even more to the point is that all of these club-400 elites were once just like "us." Jobs worked on the first Apple computer in a garage on a shoestring budget. He had vision, not wealth, to propel him to fame and fortune. Oprah Winfrey (No. 139) rose from poverty to TV queen through determination, hard work and a couple of lucky breaks. Even Warren Buffett, No. 2 on the Forbes list, started out looking very much like just another hardworking middle-class kid with good Midwestern values.

These storied rises from "rags to riches" are what make America the unique and prosperous nation it is. Some critics would have us believe that the American dream is dead. But that's a view purveyed by those without the vision, the grit, the energy or the single-mined determination to build a better mousetrap. Starry-eyed inventors and entrepreneurs have no doubts about that dream. They know it exists and that they are going to achieve it. Maybe not on the first try, but eventually. That's the entrepreneurial spirit that drives competitive markets, that not only makes the American dream come true for some (the 1%) but also improves life for the many (the 99%).

What really motivates the OWS movement is not resentment against the 1% but a sense of futility in grappling with a weak economy. With unemployment hovering around 9%, and with all the recurrent plant closings, foreclosures and cutbacks in public services, there is a lot of anger to vent. But class warfare isn't the solution.

Our frustrations are more the product of Washington than Wall Street. We have been promised a lot and received little. Obama (who made millions in book royalties the last few years) sowed the seeds of disillusionment when he overpromised what his February 2009 stimulus package could deliver. A series of policy failures and political deadlocks has left people feeling disenfranchised and forgotten. Calling out millionaires and billionaires as the culprits in this economic saga is disingenuous and ultimately self-defeating. Those 1 percenters are not an avaricious "them" but in reality the most entrepreneurial of "us." If we had more of them and fewer grandstanding politicians, we would all be better off.

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