Monday evening at the Associated Press, aka the Administration's Press, Hope Yen, with the help of lead AP pollster Jennifer Agiesta and three other reporters, tagged 20 percent of Americans as "rich."
To do so, she reinvented what it is to be "rich" or "affluent." It apparently has nothing to do with how it is normally defined, i.e., based on current net worth (assets owned minus debts owed). Ms. Yen's and AP's yearning is apparently to base it on whether you're in a household which has had annual earnings above $250,000 — ever. Really. The purpose of the piece appears to be to go after this segment of the population, such as it is, because they aren't knee-jerk supporters of limitless government spending, and won't spend money on consumption to improve the economy like Keynesians think they're supposed to. Be on the lookout for a clearly misused word (HT to emailer Alfred Lemire; bolds are mine throughout this post):
RISING RICHES: 1 IN 5 IN US REACHES AFFLUENCE
Fully 20 percent of U.S. adults become rich for parts of their lives, wielding extensive influence over America's economy and politics, according to new survey data.
These "new rich," made up largely of older professionals, working married couples and more educated singles, are becoming politically influential, and economists say their capacity to spend is key to the U.S. economic recovery. But their rise is also a sign of the nation's continuing economic polarization.
They extend well beyond the wealthiest 1 percent, a traditional group of super-rich millionaires and billionaires with long-held family assets. The new rich have household income of $250,000 or more at some point during their working lives, putting them - if sometimes temporarily - in the top 2 percent of earners.
The new survey data on the affluent are being published in an upcoming book, and an analysis by The AP-NORC Center for Public Affairs Research provided additional information on the views of the group.
In a country where poverty is at a record high, today's new rich are notable for their sense of economic fragility. [*] They rely on income from their work to maintain their social position and pay for things such as private tutoring for their children. That makes them much more fiscally conservative than other Americans, polling suggests, and less likely to support public programs, such as food stamps or early public education, to help the disadvantaged.
Because they spend just 60 percent of their before-tax income, often setting the rest aside for retirement or investing, he says their capacity to spend more will be important to a U.S. economic recovery.
[*] — In context, I'm almost certain that Yen meant to write "frugality." Note that being "fiscally conservative" is almost a vice, and not a virtue, as is failing to blindly support any and all government spending initiatives.
Apparently AP hasn't noticed how low the U.S. savings rate is, both absolutely compared to previous decades and when measured against other countries. How many of these "affluent" people already pay 40 percent of their income to various taxing authorities (including all income, payroll, and property taxes), and aren't saving a dime? I'll bet it's quite a few.
According to AP, you can be flat-on-your-keister broke right now and have very little current income, and yet somehow still occupy the ranks of its bizarrely defined "affluent 20 percent." How can such a person be a participant in any kind of "rise"?
As seen in this Google search on its text, earlier versions of Yen's report contained the following sentence:
This little-known group may pose the biggest barrier to reducing the nation's income inequality.
That "barrier" sentiment is still evident in the captions at photos accompanying Yen's item at the wire service's "Big Story" site.
Apparently if it weren't for these implicitly evil 20 percenters, the government could open up the spending spigots and end income inequality once and for all.
Charlie Martin over at PJ Media did some interesting math on this topic last week:
... there is no poverty in America, and I can prove it. According to a Cato Institute study published last year, the combined expenditures for federal and state governments directed to means-tested public assistance — “welfare” — is approximately $1 trillion (yes, with a “T”) a year.
There are approximately 48 million people in the U.S. with incomes at the poverty level or below.
The application of advanced mathematics — long division, and I did it in my head thank you very much — tells us that’s about $21,000 per person per year. Obviously, that’s $84,000 for a family of four.
That’s got a problem, though. According to the 2013 Federal Poverty Guidelines, the poverty level for a family of four is $23,950. The total of $84,000 is roughly 380 percent of the federal poverty guidelines.
Obviously, there’s no poverty left in America.
Unless, of course, that money isn’t actually being spent on the poor people at all. I wonder where it goes?
Unfortunately, governments are sopping up a far too disproportionate share of the money which could be going to the poor, and using it to keep bureaucrats in their nice homes and relatively cushy lifestyles. (If you think that's too strong of sentiment, note how booming and prosperous Metro DC is, particularly its outer-ring suburbs, while much of the rest of the country continues to suffer from protracted economic malaise.)
The left has been very effective at demonizing the "greed" of those who don't think the bureaucrats' gravy train should continue. As long as that's the case, there will never be enough money to geniunely help the poor. The government will continue to gobble up the lion's share of any additional money before it can do any real good.
AP's writeup appears to be an opening salvo in broadening the politics of envy.
Cross-posted at BizzyBlog.com.