The recession: Is it time to soak the rich?

“This is not the easiest time to be rich,” said David Leonhardt in The New York Times. As recently as a few years ago, “the image of American wealth was a heroic one,” embodied by such iconic business leaders as Bill Gates and Jack Welch. But after major financial institutions collapsed last year, plunging the world economy into a recession, the public image of the rich has tended “toward the corrupt, or at least the hapless”—think of Bernie Madoff or the greedy traders at AIG. As a result, the public is out for rich people’s blood, said The Economist in an editorial—or their money, anyway. Recent polls have found that large majorities favor strict caps on executive pay and bonuses in companies taking federal bailout funds, with 36 percent favoring government-established limits on all executive pay. That’s absurd, but it reflects the hardening conviction “that the greedy rich have cheated decent working people of their rightful share of the pie.”

It may feel good to rail against the rich, said Ari Fleischer in The Wall Street Journal, but we’d better watch what we wish for. The demonization of the “greedy rich” readily translates into support for higher taxes on them. That, of course, is exactly what President Obama is pushing for. But the wealthiest 10 percent of Americans already pay 72.4 percent of federal taxes. The Democrats want them to pay even more, “so there is more money for them to redistribute.” This may be “clever politics,” but it’s “risky policy.” There are simply not enough rich people to fund the expanding government Democrats dream of. So either the definition of “rich” will get pushed ever downward, or we’ll be facing deficits that could truly bankrupt the nation. Class warfare, in the end, hurts everyone.

But there’s no denying that “the country’s mood is shifting,” said Amber Arellano in The Detroit News. “Bashing greedy Wall Street tycoons has become fashionably fun” and there is a growing awareness of the “average hardworking guy who’s unfairly getting the shaft.” At the same time, concerns that we are on the verge of a new “class war” are wildly overblown. A recent Pew poll found that

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most Americans are still “relatively upbeat about their potential to reach the American dream,” but they want to make sure everyone has “a fair chance” to fulfill that dream. They are not angry at the rich per se—only at the notion that the game has been unfairly rigged in their favor.