Because the observation that they're all relatively happy is contingent on where they're anchoring their self-worth. If the barback gets to hang out for a day with the CEO he's going to realize that he's working hella harder for a fuckton less money and it's not going to make him pleased. Meanwhile the CEO is going to realize that poor people make him uncomfortable because goddamn it, Jerry down the street bought a Viper so it's not like he's a bad person and he doesn't think he should feel guilty for wanting a Tesla because it's zero emissions, for god's sake!

So it seems like you're tacitly arguing for social stratification. At least if you want the end goal to be happier citizens. And that's interesting because I've never really heard an argument for social stratification couched in terms of personal happiness, even for those at the bottom.

As for the public policy lesson... it's mind-bending that the issue, as you describe it, seems to be that people don't see tax dollars being spent in a way that's benefitting them, so they assume assholes in charge are up to no good, and then get more distrustful of government. Your point being that people are mindful of what government is and is not providing for them. Yet, Sam Brownback and the GOP got to run their Republican experiment for the people of Kansas without their hands being tied in any way by no-good Democrats, the result of which is the state is imploding, businesses and residents are fleeing, social services are being cut, people are being kicked off Medicaid, the sky is falling... And yet, these people still vote Republican (Brownback was reelected in 2014)

In 2010, the tea-party wave put Sam Brownback into the Sunflower State’s governor’s mansion and Republican majorities in both houses of its legislature. Together, they implemented the conservative movement’s blueprint for Utopia: They passed massive tax breaks for the wealthy and repealed all income taxes on more than 100,000 businesses. They tightened welfare requirements, privatized the delivery of Medicaid, cut $200 million from the education budget, eliminated four state agencies and 2,000 government employees. In 2012, Brownback helped replace the few remaining moderate Republicans in the legislature with conservative true believers. The following January, after signing the largest tax cut in Kansas history, Brownback told the Wall Street Journal, “My focus is to create a red-state model that allows the Republican ticket to say, 'See, we've got a different way, and it works.' "

As you’ve probably guessed, that model collapsed. Like the budget plans of every Republican presidential candidate, Brownback’s “real live experiment” proceeded from the hypothesis that tax cuts for the wealthy are such a boon to economic growth, they actually end up paying for themselves (so long as you kick the undeserving poor out of their welfare hammocks). Backers of the budget touted projections from the Kansas Policy Institute, which predicted it would generate $323 million in new local revenues by 2018. But marginal gains at the municipal level were dwarfed by the $688 million loss that Brownback’s budget wrought in its first year of operation.* Meanwhile, Kansas’s job growth actually trailed that of its neighboring states. With that nearly $700 million deficit, the state had bought itself a 1.1 percent increase in jobs, just below Missouri’s 1.5 percent and Colorado’s 3.3.

(There's more in that article about the GOP experiment in Louisiana led by Bobby Jindal -- more aggravating analysis about the state legislature giving the largest tax cut in its history while the rest of Louisiana disintegrates.)

My point in bringing that up is: the public policy lesson you mentioned, where socialism is doomed to fail because people can't objectively evaluate its impacts, seems doubly doomed to fail. Evidently, a strikingly large percentage of Republicans not only don't want help in the form of a socialist safety net, but also are eager for rich men to get richer at their expense. So Democrats trying to take credit for helping the poor? Visibly and vocally connecting the taxes people pay with the improvement of society around them? It would fall on deaf ears.