When situations change, people tend to react to it based on whether their personal situation changed for the better or worse than what it was before, rather than where they stand with respect to other people. So for example, during the time of the financial downturn that began in 2007, we had the spectacle of people working in investment banks lashing out angrily because their usual hefty bonuses had been reduced, and we heard complaints from them about how hard it was to live on incomes of $250,000 or more (private schools and live-in help and summer homes cost so much) and thus how unfair it was to increase taxes on them. From their point of view, a lowering of income was an intolerable hardship even if they still were in the top 2% of income earners in the country and extremely well off according to any objective measures. [Read more…]
