Why Hating The Rich Is Idiotic

The other day I saw some Hillary Clinton comments, the current Secretary of State, at some speech she was giving. In a nutshell, she was commenting that it was not good that some Americans make so much money. I asked myself why she was discussing how much money Americans make relative to her capacity as Secretary of State. I would have thought, and hoped, that she would be focused on a few other things including:

• An impending war between North and South Korea.
• A naval confrontation outside of the Gaza Strip between Israeli naval vessels and an alleged aid convoy.
• Iran and its nuclear ambitions.
• Potential Russian sale of state-of-the-art anti-aircraft technology to Iran.
• The whole Israeli-Palestinian age old question of co-existence.
• China and the whole set of associated issues including trade, human rights, Tibet, Taiwan, etc.
• Japan and the continuing issue of stationing U.S. armed forces personnel on Okinawa which has already cost one Japanese leader his job.
• Mexico and the continuing illegal immigration problem.
• Continuing wars in Afghanistan and Iraq.
• The destabilization of Pakistan.

Looks like she has a pretty full plate and maybe should focus on her real job and leave American earnings alone. Plus, we have already covered the topic in our blog and showed that very rich Americans are also very charitable Americans, as a few of the following examples illustrate:

• Bill and Melinda Gates, through their foundation, have contributed billions of their wealth to many worthy causes.
• Warren Buffet has contributed billions of his wealth to many worthy causes.
• Brad Pitt and Angelina Jolie have donated millions of dollars of their wealth to many worthy causes in addition to providing their time and fame to worthy causes.
• Sandra Bullock has written million dollar checks to 9-11 causes, Katrina victims, and other causes.

Thus, we have already shown that rich American citizens have made more positive differences in more people's lives than they ever could have done if they followed Clinton's tenet that some Americans "make too much money." I would bet that their "excessive" wealth has resulted in more positive results for humanity more efficiently and more effectively than any political class operated government program.

However, today let's take a look at another example of why hating the rich is idiotic. The example will compare and contrast Detroit, the largest city in Michigan, and Grand Rapids, the second largest city in Michigan. As background, consider the following data from the Federal government:

• Detroit had a population of 1,849.568 people in 1950 which has decreased by more than halve to 912,062 in 2008.
• Grand Rapids had a population of 176,515 in 1950 which has increased by about 10% to 193,396 in 2008.
• Detroit had the third highest unemployment rate among all Michigan metropolitan areas, according to recent Bureau Of Labor Statistics reports and was very close to having the highest unemployment rate.
• Grand Rapids had the third lowest unemployment rate among Michigan metropolitan areas.
• The primary industry in Detroit has historically been the auto industry which has been decimated by any number of factors.
• The primary industry in Grand Rapids has historically been the furniture industry which has been decimated by any number of factors.

Same state, same decimating of the dominant local industry but two radically different profiles from a population and unemployment perspective. Why the differences? Consider a recent review of the Grand Rapids story in the May 24, 2010 issue of Fortune magazine by Alex Taylor III (note: this issue puts the decline in Detroit's population even steeper, asserting that Detroit's population in 2010 is only 800,000):

• Grand Rapids is the home of a large vibrant university, Grand Valley State University, that is growing.
• Grand Rapids has a newly redeveloped entertainment center with a new convention center and sports arena.
• Grand Rapids has a vital downtown with business and government office buildings.
• Grand Rapids has a modern $1 billion medical center with a cancer research center, specialized treatment facilities, and a medical school.
• A bunch of local private citizens, not government bureaucrats, got together in the early 1990s and put together a development plan, Grand Action, that has resulted in the above accomplishments, better economic statistics that would be expected of a Rust Belt city that lost is primary industry, and a better life for its citizens.

How was this plan possible:

• Jay Van Andel of Amway fame put together a set of private, not government donors, who raised $21 million for Grand Action.
• A major gift from Richard DeVos of Amway led a $33 million effort to raise money for the convention center.
• Devos and Van Andel sponsored the building of a new Marriott hotel downtown, according to the article.
• Fred Meijer, a major supermarket player, helped finance a $10 million renovation of the city's Civic Theater. Meijer also donated money to help create a 132 acre garden and sculpture park.
• Peter Wege of Steelcase gave $20 million to help fund a Grand Rapids art museum.
• Devos, Meijer, and other business people raised money and donated land so that the university could expand to other locations around the city.
• Van Adel also helped fund a new hospital institute for biomedical research.

What have all of these rich people and their plan accomplished, even though their personal wealth generation upsets and disgusts members of the political class? According to the article, Grand Rapids now has "a more stable economy, one that can better withstand the ups and downs of economic trends. Now manufacturing ranks as the region's second leading employer, replaced at No. 1 by those sectors poised for the demographics of the early 21st century: education and health services." Sounds like a pretty good deal which was accomplished with minimal government "help", i.e. interference, waste, and incompetence.

And Detroit? According to the article, "for years, [Detroit] city leaders failed to deliver a long term vision of an economic future that could alleviate the impact of a declining auto industry." Maybe they should find some of those "bad" rich people that Hillary so despises, they seem to have done quite well in Grand Rapids with minimal government help, improving the life of people in that city.

While this is certainly and uplifting story about Grand Rapids, there are two scary things to come out of the article and observations of people like Obama and Clinton. First, these politicians still do not get it, with "it" being that grandiose government programs never work, they just continue to eat up large chunks of taxpayer money but have nothing positive to show in return. The decline of cities like Detroit proves that typical politicians are not capable of fixing anything while the success of Grand Rapids' way of life and living environment was possible by rich local citizens. Second, it took Grand Rapids almost twenty years to get to this spot, despite having a good plan that was implemented well. How long will it take, if ever, for Detroit to rebound since they do not have a plan yet and their politicians have not shown any ability (yet) to implement anything well. Scary on both counts.

Hillary, please check on that little Korean problem and work on that, allow Americans to still live in the land of opportunity. We will all be better off.

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