Why do huge Wall Street bonuses provoke so much more public indignation than similarly gigantic lottery jackpots?
At least financial tycoons can try to argue that their payoffs stem from their own wise decisions or productive hard work. But Powerball winners get rewarded for patently stupid behavior: wasting a few dollars (usually on a regular basis) on addictive games of chance with only the remotest possibility of success.
Moreover, when some lucky bozo collects on a swollen jackpot that’s accumulated in a state-sponsored lottery, it means that this particular treasure won’t be available to anyone else; when somebody wins, the other players all lose. But if a stock broker or investment banker gets a big bonus, that doesn’t mean that others won’t be similarly rewarded or that his clients or even his competitors will suffer. In fact, such rewards generally come in clusters, rather than in singular or exceptional instances.
Of course, much of the public outrage against Wall Street pay-offs stems from the idea that financial manipulators have stolen bailout money that rightly belongs to the taxpayers. But this argument ignores the fact that the most recent round of controversial bonuses involved firms that had already repaid their TARP funds with interest (like the notorious Goldman-Sachs),or else never took government dough in the first place.
By contrast, every big time lottery winner takes money directly from government coffers, so that the bigger prize packages mean even bigger losses for cash-strapped states. Of course, Powerball apologists will justify these payoffs as periodically necessary, in order to encourage the public to keep buying tickets. But by the same token, Wall Streets defenders can argue that monstrous bonuses help encourage bright, eager and talented young hotshots to keep toiling tirelessly in the hopes of securing their own big score.
Whether or not the aspiring Gordon Gekkos ever reach their greed is good goals, it is tough to feel much sympathy for these privileged people. Financial industry tycoons usually boast the formidable advantages of Ivy League educations or family connections, while state jackpot winners often identify themselves as janitors or factory workers or even day laborers. America loves underdogs, so we rejoice at lottery triumphs while seething with resentment when pampered plutocrats collect even more money.
But the impoverished status of so many well-publicized mega-millions victors ought to make us less accepting of the lottery process, not more so. All studies of government-sponsored games of chance show that they draw their dollars disproportionately from the most disadvantaged members of society, as poor people demonstrate precisely the sort of habits and world views that keep them poor. Lottery losses of just five dollars a week (a common pattern in the nations poorest neighborhoods) could otherwise yield life-changing results (like a compound-interest portfolio that will likely exceed five figures within 20 years) if that money were saved and invested. Well-publicized lotto millionaires promote the pernicious idea that financial deliverance comes from sheer, dumb luck rather than ceaseless work and conscientious self-discipline, thereby encouraging the dysfunctional values that undermine the chances of economic advancement.
We may feel a perverse sense of pity, and even superiority, over those who collect gargantuan checks from games of chance, and we can take secret delight in reading the harrowing tales of how they’ve blown the money and shattered their lives. When it comes to Wall Streets perpetual winners, however, it’s all but inevitable to feel resentment, based on the strong suspicion that they’ve rigged the game in their own favor. Its nearly impossible to cheat at high profile lotteries, and most winners will succeed only once in a life-time, but the big champs of high finance seem to score again and again, decade after decade.
Their success may not harm others, and it’s true that wealth in the world doesn’t count as a zero sum game: the fact that Peter earns more doesn’t mean that there’s less wealth left over for Paul to pursue. Yet it still feels bitterly unfair to see that God (or nature, or destiny) hands out riches, talent and advantages so unevenly. At least a lotto game seems reassuringly random, by comparison.
Americans can accept a winner of Megamillions who collects $340 million simply because he’s luckier than we are, but we wince at the idea of bankers drawing a similar amount because they’re better connected, smarter, more sophisticated or even more productive. Such notions offend our egalitarian instincts, so we’re left with the anomalous situation of feeling more comfortable with fortunes based on blind, purposeless luck than we are with any concentration of wealth derived from planning or plotting, cooperation, conspiracy or competition.