Naked Capitalism Link of the Day

Today's link from naked capitalism: Anxiety keeps the super-rich safe from middle-class rage, at the Guardian:

But the gap between the richest 1% or 2% and everybody else in the top 20% or 30% is now so great and growing so rapidly that, one might reasonably think, it should change the terms of political trade. The income distance may be huge but the social distance is not. Those in the top 2% and the next 28% have often been to the same schools and universities. More important, they compete for scarce resources: places in fee-charging schools, houses in the best areas, high-end personal services. The super-rich have provoked raging inflation in the prices of these goods. Many of the not-so-rich were born into the professional classes and high expectations. Now, to their surprise, they find themselves struggling. In income distribution, their interests are closer to those of the mass of the population than to people they once saw as their peers.
They are not, however, imminently likely to join a crusade for equality. This generation of the middle classes has internalised the values of individualist aspiration, as zealously propagated by Tony Blair as by Margaret Thatcher. It does not look to the application of social justice to improve its lot. It expects to rely on its own efforts to get ahead and, crucially, to maintain its position
As psychologists will tell you, fear of loss is more powerful than the prospect of gain. The struggling middle classes look down more anxiously than they look up, particularly in recession and sluggish recovery. Polls show they dislike high income inequalities but are lukewarm about redistribution. They worry that they are unlikely to benefit and may even lose from it; and worse still, those below them will be pulled up sufficiently to threaten their status. This is exactly the mindset in the US, where individualist values are more deeply embedded. Americans accepted tax cuts for the rich with equanimity. Better to let the rich keep their money, they calculated, than to have it benefit economic and social inferiors.
As Runciman observed, "most people's lives are governed more by the resentment of narrow inequalities, the cultivation of modest ambitions and the preservation of small differentials" than by the larger picture of social justice. That applies as much to the professional as to the working classes.

I've long been puzzled by why my friend who never made more than $50,000 a year thinks people who make $75,000 to $100,000 are overpaid and need to sacrifice, while thinking that people who make $1,000,000 have earned it and should be able to keep more of it.  I think it's just that he really doesn't know anybody who makes a million a year, while he knows a lot of people in the 75 to 100 thousand range, and he sees that they blow money on stuff they don't need.  It still seems strange, but I think he associates the million a year person with some amazing invention or something, and that they worked hard to get that money.  I tried to point out that such people make enough that they can pay higher marginal rates on very high amounts of income, but he tells me that they deserve what they get.  I think eventually people in the middle class will get mad at the super rich, and if they do, those guys up top better watch out.  When the scales fall from peoples' eyes, they are going to be out for blood.

One other note, today's links showed me one of the best post titles of all time: Longtop Financial: lessons in the morphology of sin, loss of virginity and your 17 year old daughter, at Bronte Capital.