Since today features the biggest IPO of all time, which will in turn create the first TRILLIONAIRE of all time, wealth inequality seems like a pretty reasonable topic. I am prompted to do this post because of a long email I received on Thursday morning. It was a friendly email from a reader who took some exception as to what he perceived was my disposition toward homelessness. It is a thoughtful and well-written message, and beneath it I will share with you my reply.
The sender’s email is being shared here with his express permission (otherwise I would not be doing this post).
Tim:
I took the time recently to carefully familiarize myself with your Slope of Hope website. I have watched you for years during your long association with Tom Sosnoff and the various iterations of his financial media efforts. Your market commentary is by far the most intellectual and articulate contribution to the body of information that is available through that network. Moreover, you are a really funny guy in your own quiet way and I find your snarkiness something that I personally can easily relate to.
I read recently some of your various posts on the subject of wealth inequality to find out where you stand on that question and I find myself trying really hard to reconcile your views on that question with mine. I read your post from several years ago about homelessness and in particular the post you wrote about the woman with the German Shepherd and the cardboard sign that read simply, “Cancer” and your having handed her a $100 bill which she ungratefully refused to acknowledge you for having made that gesture.
The subject of homelessness for me represents one of the perfect microcosms of growing wealth inequality in our country. As a now retired attorney that spent a lot of his time practicing in the area of real estate, real estate financing and real estate tenancies, the subject of homelessness is near and dear to me. Watching the problem explode to the magnitude it currently manifests makes me damn angry. Not because I feel sorry for the downtrodden and the victims of the phenomenon but rather because I see a society which continues to turn a blind-eye to the problem and refuses to take steps to genuinely address what I think is the root cause of what had caused a “problem” which has always been with us to a “PROBLEM” that has grown beyond anything we as a country have witnessed. Ever.
My wife and I in our retirement have recently taken to attempting to find relaxation by taking our Airstream Interstate van (yes, we have one of those, so it’s not like we’re personally hurting) down to Shelter Island in San Diego to spend the day, enjoy the cool ocean breezes, and walk along the various walkways to get in some steps, pleasantly. However, we have had to curtail that behavior, because the City of San Diego, in its effort to “clean up” the homelessness problem on Shelter Island (and elsewhere) has barred the parking of vehicles longer than 20′ in the parking lots there. (Our van is 25′ long, so we got fucked.)
When we did have the opportunity to experience Shelter Island in the manner described above, we noticed that the problem of homelessness there (as well as across San Diego County) had increased exponentially. During our many walks, we did from time to time interact with some of those people who had indeed been attempting to take up residence on Shelter Island living in their cars, vans, campers, broken down RVs in order to survive. We listened to their various stories (at least from those willing to open up about such things), and we found that among those who had attempted to establish themselves as residents there, one could find a palpable mix of people who were in some cases nuts, in some cases, advantage takers, and in some cases, people desperate because they genuinely could no longer afford housing.
One particular story we heard came from a woman who was an LVN who held down two separate positions at local hospitals. She wasn’t earning enough at that point to afford suitable housing, so she was living in her car (a Mercedes no less) with her three dogs and a firearm. She related that she had just broken up with her husband after their house burned down in North San Diego County and they had each gone their separate ways. Now, I don’t know if she was a bullshit artist like your lady with the “Cancer” sign or exactly what her precise story was, but what she described seemed sincere to my wife and I and also had a certain measure of plausibility. Many of the stories we heard also came from people that did not present as being mentally ill, but rather as just not making enough money to pay the ridiculous prices for housing (rental) in San Diego.
Our walks took us on one occasion to the Bali Hai restaurant where the two of us used to work in the 1970s. We encountered an older man there who we recalled was married to a woman from the family that has owned the restaurant for probably half a century now. We told him who we were and he was so pleased that we had recognized him and had a history with the Bali Hai that he took us upstairs to meet with his wife who was present that day on the property. After reminiscing a little bit, the subject of the homelessness problem on Shelter Island came up and the woman that had the ownership interest could not stop describing how the problem was impacting her business, causing her profits to decline, offending her sensibilities, blah, blah, blah. Rather than having any serious ideas as to how to address the problem, she insisted that these offenses to her senses be swept away and the problem eliminated with force and celerity. Meanwhile, a quick glance at her menu indicated that the Bali Hai made it a practice to impose a 2% surcharge on every tab at the restaurant to compensate them for the increased costs they incurred when California raised its minimum wage. What a sweetheart!
I tell you these things because I am concerned that your attitudes towards the subject of wealth inequality and how to address it amount simply to a solution involving having the downtrodden just simply “pick themselves up by their bootstraps” and to just stop acting so nutsy and crazy. It ain’t that simple and it is going to require society to take some form of steps to remedy the rampant inequalities in order to avert what you properly point out could be a Russian or Chinese Revolution approach which is to forcefully strip the wealth from those who have amassed it. Society’s solutions may, in some instances, have to involve some type of confiscation of that wealth and to redistribute it. I mean, after all, isn’t that what taxation is? A form of confiscation? It just then becomes a matter of to what extent the confiscation takes place, doesn’t it?
I just don’t think that the sole and only solution to the problem lies in changing the policies of the Federal Reserve, the elimination of the Federal Reserve and the way in which our tax system presently operates, although addressing those things would be helpful. The problems have just gotten way too far out of hand.
Here was my brief reply:
I appreciate the thoughtful (and lengthy!) email.
I’m sorry I give the impression that people just need to get up off their butts and work. That’s not me at all. I’ve written many times about this, and perhaps you’ve already perused this section:
This kind of post is much closer to my belief set than the one you cited:
On Slope, I’m known as kind of the left-wing nutjob compared to the rest of them (and I’ve long ago decided to shut my mouth about that chap in the White House). I daresay most folks would say I’m way TOO compassionate (you’ve probably heard tell of Spencer Pratt’s “plan” to just ship all the homeless to Seattle during his failed mayoral campaign).
If you’d like your thoughts to get some exposure, allow me to post your email (anonymized) for the group. Regardless, thank you again, and I hope you continue to enjoy Slope.
– Tim
