The “1%” Is Really The 20 Percent And Big Government Is Their Employer
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The “1%” Is Really The 20 Percent And Big Government Is Their Employer

is in the fabled “1%”: the folks the Occupy Wall Street movement says are those who are “writing the rules of an unfair global economy” because of massive inequality of income. But Lott doesn’t feel particularly rich or powerful.

I definitely don’t see myself as rich,” says Lott, who is saving to purchase a downtown luxury condominium. That will be the case, he says, “the day I don’t have to go to work every single day.”

Did Lott inherit a great family fortune or earn a CEO’s salary at the expense of workers in a multinational company? Not exactly.

In this country, you don’t get anywhere without working hard,” said James Lott, 28, a pharmacist in Renton, Wash., who adds to his six-figure salary by day-trading stocks. The son of Nigerian-American immigrants, Lott says he was able to get ahead by earning an advanced pharmacy degree. He makes about $200,000 a year.

After growing up on food stamps, Lott now splurges occasionally on nicer restaurants, Hugo Boss shoes and extended vacations to New Orleans, Atlanta and parts of Latin America. He believes government should play a role in helping the disadvantaged. But he says the poor should be encouraged to support themselves, explaining that his single mother rose out of hardship by starting a day-care business in their home.

USA Today says these 20 percenters are a different breed, more likely to gain and lose income so that many are “temporarily” rich:

…the new rich are those with household income of $250,000 or more at some point during their working lives. That puts them, if sometimes temporarily, in the top 2% of earners.

Even outside periods of unusual wealth, members of this group generally hover in the $100,000-plus income range, keeping them in the top 20% of earners.

Someone who epitomizes this group is Robert Kane of Colorado Springs, Colo. He doesn’t fit the demographic of the “old boys’ network” that the Occupy Wall Street movement rails against. He says he was “humbled” in the 2008 Wall Street meltdown, but has earned his fortune back in the marijuana business. Once a registered Republican, he now is a political independent, but still wants to keep the money he’s earned from the government.

Now a senior vice president for a private equity firm specializing in the marijuana business, Kane says he’s concerned about upward mobility for the poor and calls wealthy politicians such as Romney “out of touch.”

But Kane, now a registered independent, draws the line when it comes to higher taxes.

“A dollar is best in your hand rather than the government’s,” he says.

Despite these two examples, it is the government that is driving much of this new wealth. What area of the country is seeing the highest increase in wealth? Washington, D.C. The nation’s Capitol is “awash” with wealth, tied to government services, lobbying groups, and crony capitalism.

The share of money the government spent on weapons and other hardware shrank as service contracts nearly tripled in value. At the peak in 2010, companies based in Rep. James Moran’s congressional district in Northern Virginia reaped $43 billion in federal contracts — roughly as much as the state of Texas.

At the same time, big companies realized that a few million spent shaping legislation could produce windfall profits. They nearly doubled the cash they poured into the capital.

Tens of thousands of people are moving to D.C., hoping to cash in. At one diner in the area, there is a telling and simple sign of the money within easy reach:

At Cafe Joe, a greasy spoon near the National Security Agency in suburban Maryland, software engineers with top-secret clearances merely have to look at the place mats under their fried eggs to find federal contractors trying to entice them away from their government jobs with six-figure salaries and stock options. The place-mat ads cost $250 a week. They are sold out through 2014.

More signs? The pages in the Washington lobbying directly have quadrupled in the past 30 years, and the number of lawyers in the D. C. area have increased twice as much as in the rest of the nation in just 12 years. Political science writer Lee Drutman, whose upcoming book is entitled The Business of America is Lobbying, says companies have made decisions regarding a presence in D.C. because that’s where the money is.

A growing number of companies,” Drutman said, “became fully convinced that having a large-scale Washington presence was a good strategic decision…You know that if a company stopped lobbying, it would get creamed…That’s why companies don’t stop lobbying.”

It appears that many folks are working hard to increase their personal income, and want to keep their money out of the government’s hands. Yet, government growth is clearly creating an sub-economy that relies on lobbying and servicing an ever-growing government. The Occupy Wall Street folks might want to change their name to Occupy Pennsylvania Avenue: that’s where the real money is.

Elise Hilton

Communications Specialist at Acton Institute. M.A. in World Religions.