Rich people waste much more money than poor people
Another round of glazing the rich online is completely detached from reality.
So much criticism of Twitter has focused on its increasing Nazification in recent years that there’s been little discussion of another disturbing trend: its escalating deification of the rich. Though the site before Elon had a much larger celebrity presence, it was ironically much more egalitarian; posters could still gain a significant following off of the strength of their posts, and the larger left-wing presence cultivated a norm of contempt for wealth and power. Today, the site’s most popular posters are billionaires, finance guys, and endless waves of sycophants who seem only to exist to cheer them on.
Enter Aella, a influencer who rich tech guys seem to love, presumably because she is a Silicon Valley sex worker, but also because she loves saying stuff like this:
Predictably, this launched a whole wave of commentary about how irresponsible the poor are with their money, particularly compared to the rich. One of the more common talking points for example was to point research supposedly proving that poor lottery winners “run through their earnings and end up declaring bankruptcy at a much higher rate than the general population” — a finding that the National Endowment for Financial Education has explicitly disavowed:
Over the past couple of years several news organizations have attributed a statistic to the National Endowment for Financial Education (NEFE) stating that 70 percent of lottery winners end up bankrupt in just a few years after receiving a large financial windfall. This statistic is not backed by research from NEFE, nor can it be confirmed by the organization. Frequent reporting—without validation from NEFE—has allowed this “stat” to survive online in perpetuity.
That said, there is a simpler but much more serious problem with this claim that the poor are more wasteful than the rich: the poor spend much, much less money than they do. To listen to the discourse, you would think that the poor are all spendthrifts who spend an inordinate amount of money on shoes, entertainment, and vices while the rich are careful and even miserly savers who frugally eat homecooked meals and avoid unnecessary expenses. But this of course is not true at all:
Across the board, the rich spend way more money on basically everything than the rich do. Set the bar of what is “necessary” wherever you like and it remains the case that the rich are massively outspending the poor on it. There is simply no way to call poor people “wasteful” spenders that is not an even worse indictment of the rich.
Much of the confusion on this point, of course, comes from the fact that poor people spend a larger percentage of their money on many items than the rich. But as we can see above, this is not because the poor are burning money that the rich are carefully saving; it’s because the rich have tons of money that they have to spend on anything at all. This is a testament to their ability to their income, not to their frugality!
In a sane discourse these are not data points I should have to lay out with charts, because intuitively everyone knows that the rich spend their money on luxury cars while the poor buy used or economy. But somehow in capitalist discourse, the belief that wealthy people are unusually frugal exists side-by-side with the belief that poor people, who spend even less, are irresponsible spenders. It makes no sense whatsoever, but if you’re a libertarian who courts billionaires it’s exactly the sort of thing you have to believe.
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