Powerball: The Rich Get Richer

December 5, 2011

Political Theory


Image

A recent viral story involving three asset managers from the prosperous town of Greenwich, Connecticut who won a $254 million Powerball jackpot has captured the attention of many disgruntled citizens particularly of the Occupy Wall Street Movement. The winners have been deemed disgraceful, shameful, and indicative of the problems facing our country according to the  New York Daily News. Adding to the pain of the pubic, the lottery win was astonishingly the 12th biggest jackpot in Powerball history, allowing the three men to take home an after-tax lump sum of $104 million dollars in cash, not a bad pay day.

For those advocating against the income inequality and failing economy of our country, this storycannot be more disturbing. In an article regarding the events from the New York Daily Times the author writes, “the lottery screws the poor to begin with, the fact that rich men won is an insult.” Connecticut Lottery Corp. chairman Frank Farricker told the Wall Street Journal that he did a “double take” when learning who the winners were, but “While the stereotype may be a poor guy down on his luck who wins, the facts of the matter is: Everyone is equal when they play. These guys, they played one buck.” The irony of well-to-do bankers hitting the jackpot was perhaps best appreciated at Zuccotti Park, in New York City, center of the Occupy Wall Street demonstrations, where protestors have been complaining for months about the top 1% making out like bandits while everyone else struggles.

Yet under further investigation from one of our recent readings, these men winning the Powerball may not be a critical sign of the failings of our economy and fractured American way. Certainly Edmund Burke, author of “Reflections on the Revolutions in France” would agree that the Occupy Wall Street movement, similar to his stance on the French Revolution, is flawed given its radical and impractical nature.

“Politics is a practical science, based on experience, and therefore radical reform is dangerous,” noted Burke in our selected reading. Therefore, these Greenwich men might be better off with the money than any one particular low-income person that has been the primary focus of American policy.

Burke, who believes that inequality in society is absolutely necessary, could note the winners as productively gaining more capital for their hedge fund Belpointe Asset Management, and thus, having the capability to invest more money and stimulate the economy. Similarly, the men in this case have a higher likelihood of making practical and rational decisions with their winnings, a point Burke stresses for a stable political community. Their efforts to donate money have already surpassed five million dollars to Veterans and are likely to continue to other charitable organizations.

Image

In one of his most powerful quotes regarding that “regulated liberty” doesn’t entail equality, Burke’s vision of society is transparent with the Powerball winners’ unexpected fortune. “If civil society be made for the advantage of man, all the advantages for which it is made become his right. It is an institution of beneficence; and law itself is only beneficence acting by a rule. Men have a right to live by that rule; they have a right to justice; as between their fellows, whether their fellows are in politic function or in ordinary occupation. They have a right to the fruits of their industry; and to the means of making their industry fruitful” (p. 109 hp. 51).

Discussion Questions:

1) Do you believe Burke’s feelings that inequality in society is absolutely necessary relate to this story as I have suggested? If so, what do you think Burke would make of the Powerball winners?

2) Another question to consider regardless of your position on Burke’s argument is if you believe that the Powerball winners are a good or a bad thing for our country. Are they emblematic of the problems of our society, or does society stand more to benefit with them intelligently using the money for their business and philanthropy?

Advertisements

Subscribe

Subscribe to our RSS feed and social profiles to receive updates.

10 Comments on “Powerball: The Rich Get Richer”

  1. ywjpeter Says:

    I think Burke would only support this lottery winning only if the rich use the money to help out the lower classes. He believes the rich have a responsibility to the poor to give back and help out the lower class. The inequality exists but the existence of it creates a certain responsibility towards one another to respect and to receive respect. The Powerball winners created a trust and put all the earnings into it. They as promised gave one million dollars to a charity for veterans, but in seen in perspective one would suggest that these winners gave barely anything to charity and kept most of the earnings themselves. The only way I see this being approved by Burke at this stage is for the winners to put the earnings into the company thus creating more jobs for people and therefore giving back to the lower class.

    I feel like this was a good and bad thing. Good because hopefully they will use this money for more philanthropic purposes, and also in their company to create more jobs. On the other hand it is a bad thing because it creates more division. This added insult to injury.

  2. rschles92 Says:

    I think we need to keep this situation in perspective. While it leaves a bad taste in our mouths because the rich get richer, we can’t associate an event like this with the crimes that were committed on Wall Street. This a group of friends who bought a lottery ticket for kicks and happened to win. They didn’t cheat, they didn’t rig anything, they didn’t lie to anyone and they had an even chance to win as anyone else. The odds of it happening are impossible, but it happened. We compare it to the deception on Wall Street because the rich benefitted from an operation that some consider to take advantage of the poor. However, it is nothing like the lies that were told to excited home shoppers to buy a house they couldn’t afford. This is a bizarre incident that should not be linked to Wall Street greed.

    • elotis Says:

      I agree with your comment. Everyone protesting at OWS are quick to call these men disgraceful crooks, however, once again, they are not focusing on the bigger picture. Let’s face it, they won out of pure luck. They paid their $1, just like everyone else, so why shouldn’t their chances at winning be the same? I just don’t understand why OWS is looking for ANOTHER group of people to blame for their woes, why don’t they focus on those that have committed actual crimes, not those that just got lucky. These men will put this money to better use than a lot of those who win the lottery and then you see their horror stories on TLC.

      Burke may support the inequality in society, however, I agree with the first comment that he would expect those that are rich to donate more to the poor. The inequality gap is okay, as long as it doesn’t keep getting bigger and bigger overtime. Yes, this instance further contributes to the inequality gap, but the fact that they are giving some back to charities can be looked at as a positive.

  3. aecorwin Says:

    Though this may deem like a case of Wall Street greed, it really is not. These men bought a lottery ticket just for fun and happened to win. Nowhere in the lottery rules is it stated that rich men may not play. Yes, the lottery is often thought of as a way for the poor to gain wealth in a somewhat ridiculous way (they should be spending their money on basic needs and not the lottery, but who am I to judge?) but the rich are just as able to play as anyone else. The fact that these men actually won is a little bit unsettling considering the sheer amounts of wealth that they already have, but it is completely valid and fair for them to win this money. I feel like Burke’s opinion on this topic would be hard to tell as he is opposed to change and this would not be change at all as the rich are staying rich and the poor are staying poor, but I also feel he would want the winners to use this money for the betterment of their community.

  4. goldman13 Says:

    I completely agree with the above comment, and disagree with the arguments that this post reveals. The Powerball Jackpot Lottery is just that, a lottery. It is luck, and just because the winners are already wealthy does not mean that they should be tagged with “disgrace” or “shame.” The men that won this large sum of money struggled and labored to be able to afford the 1$ lottery ticket. Sure, they could each afford thousands- maybe millions – more of these same tickets, but that doesn’t meant that they were “granted” the ability to get rich.

    Moreover, i think Burke would agree with me. Society is inherently unequal, and whoever wins the lottery is lucky and should be given limited further thought. Your last quote describes it all; “They have a right to the fruits of their industry; and to the means of making their industry fruitful.”

    Also, does anyone else find this a little bit humorous? I know its wrong to think, but while these wall street asset managers are walking around with a 254 million dollar check the occupiers must be having a field day.

  5. jeanchaw Says:

    This story is compelling because the lottery truly is a once in a lifetime chance. That being said, protestors of the 1% reaping all the benefits will justly be upset at another unlucky wound, and the media will only exacerbate the story.

    Nevertheless, I believe that these power ball winners are better off than any one low-income, or potentially uneducated impoverished citizen. These asset managers have an opportunity to grow their business (only worth 82$ before they won) and therefore be more beneficial to the entire state of the economy. The likelihood of someone winning the lottery in an impoverished state would in thought be a great story, but their potential lack of money management and decision to keep all the earnings rather than spread them philanthropically would ultimately only further fracture society.

    Burke would be fine with these Powerball winners. He would support their position in society and the work they do for capitalism and the economy. It is certainly mutually beneficial, as they have already donated over $5 million to assorted charitable organizations and will continue to do the right thing with each dollar they have won.

  6. bonannianthony Says:

    A lottery is complete and one hundred percent luck. As a result people can’t really get mad because wealthy individuals won the Powerball Jackpot. They had no special advantage over anyone else. I can see how people got upset that such well off people won the jackpot but they can’t be mad at those people. Obviously, the winners are not forced to give the money back, but from what it looks like they are doing some good things with the money that they have won. According to Burke the winners of the lottery should be giving up some of their money because he says society is as good as the least well off members of society. The one thing I found interesting in this story is how much money the group won. I am kind of curious to see how much money this particular Powerball Jackpot produced in revenue. I am sure the lottery is profitable I just would like to know how much money was made off of this particular jackpot.

  7. nnvirani Says:

    Let’s face it.. if you win the the lottery, you will be as rich as the 1%. Let’s just say that one of the wall street protestors were lucky enough to win the lottery, would they then become hypocrites? Burke believes strongly in inequality and regardless of who the powerball winners were, the lottery is creating inequality because a $1 investment can make you $254 million dollars. People work their whole life and do not make $1 million dollars. This is clearly not fair. With that being said, it is important to note that inequality is not only necessary but inevitable in the society we live in today. In an economic system where there is unlimited potential to the money you can make, humans (who naturally strive to better themselves first and foremost) will always be unequal financially. Blaming the top 1 percent’s greed is not going to do anything. Burke would not be too negative towards the powerball winners because they did not do anything wrong or unfair to get the winnings. They took the same odds that any one of us would have and luckily added to their already exceptional wealth. However, these powerball winners are donating large amounts of money and investing the money which will undoubtably stimulate the economy. Burke says that a society is only as good as its least well off members so this situation would not be benefiting society, as a whole, in his eyes. Although it may not seem fair that they won and others could have used the money way more, society as a whole is probably benefiting more by them winning. It is a slap in the face to the Occupy Wall Street crowd, but life is unfair – and Burke would agree.

  8. beaurh Says:

    The irony and prevalence of this story is almost comedic. These multi-millionaires can now pay off their million dollar homes with more ease than before, while the Occupy Wall Street protestors continue to struggle.

    Although unfortunate that the Powerball money was not won by a citizen in need, this money will be more efficiently spent by the CEOs and will be spent to better the economy. The winners have already donated over 5 million to charity, and the money left over will help them grow their business and eventually employ larger numbers of workers. Struggling with unemployment, the economy will benefit more from an increased job market than one or two citizens potentially spending their prize money aimlessly.

    This topic perfectly correlates to Burke’s philosophy. It highlights his view that inequality is necessary for a thriving society. He believes that the wealthy are meant to provide jobs for the lower class, and the lower class provides the wealthy with a workforce. Ideally, this is what would happen; the Powerball winners will expand their business with the won money and create job opportunities for the lower class. I believe that Burke would agree with the wealthy winning this money. Although he does state that a society is only as strong as its least well off citizen, he believes that inequality benefits the lower class. Disagreeing with nnvirani, I believe that Burke would see this situation as a means to help a society’s least well off citizen; thus, improving society.

  9. Phil O'Donnell Says:

    Firstly, it must be stated that in this situation there truly was an equal chance for anyone to win and hence there was no perceived advantage to being rich in this ‘game’; as long as a person could buy a ticket they had as much chance as winning as Warren Buffet or Kobe Bryant (if they play Powerball). Hence, these asset managers had the same possibility as winning as anyone else. Thus, there is not a debate to whether them winning was against the rules of the game or against morality, seemingly it has simply upset peoples’ sense of a moral code in society and a sense of rightness; it seems to be a case where people want increased equality and a sense of ‘fairness’, rather than the ‘injustice’ of the ‘rich getting richer’. To be precise, there was no statistical chance that a poor person would win and due to this there seems to be an angry at the absence of a fairytale story; the absence seemingly being emphasized by the context in which these asset managers won the money, namely the financial crisis of 2008 and the size of bonuses which are given to those in the financial sector.

    I feel that Burke’s believe in a sense of a natural level of inequality has some restrictions on it. For example, I don’t believe that Burke would advocate a 99% and 1% allocation of wealth (as in 1% control the majority of the wealth); however it is hard to tell where his ideals would lead society if resources were to be left primarily in the hands of the rich or elite. Burke doesn’t necessary advocate indiscriminate inequality (such as the 1% and the 99% inequality) rather he seemingly advocates the preservation of class divisions to some extent; a class distinction to the benefit of society as those in the upper classes would make more informed and more effective decisions with societal resources. Here, the context of his writing must also be considered, as in contemporary America the average level of education is much greater than in Burke’s time and furthermore there are far more people engaged in higher education, thus the idea of elitism is seemingly less justified.

    Apply these principles to this specific situation raises the question of whether these asset managers winning was to the greatest benefit of society? Some would argue that it was because they are rich and hence they don’t need the money and could thus give more to charity, whilst poorer people could be seen to need the money more and hence fewer donations would be made. However many argue against this contention, arguing that the asset managers winning this money doesn’t help society more than if poorer people had won because they are more likely to want to invest and make more money. It is clearly an ambiguous issue and completely depends on the situation and the actual actions which the winners choose to do following their win.

    Yet, I believe that the financial crisis of 2008 and the subsequent effects which America has (and will) endure shows that the rich, as a whole, cannot be expected to act responsibly, as seemingly especially the financial sector is dictated by greed; hence I would argue that society stands a better chance to benefit without the rich minority dictating the economics of an American society; a change should be made so that the majority can have greater restrictions on the minority and ensure that there is a greater sense of wealth equality and equal resource allocation. A change which, according to Karl Marx, is likely to happen with the evolution of capitalism into socialism.

%d bloggers like this: