Explain this capitalism thing to me again...

Recently I've run across a lot of articles like this one explaining that people making $250,000 annually or a little more really aren't that well off. Of course this is in the context of potential tax hikes for incomes exceeding $250,000/yr. The article quotes one person in particular who claims to be "barely getting by" on an income of $400,000 per year.

Maybe I misunderstood this one in my Economics courses, but I thought the idea behind capitalism was that people are financially rewarded for being smart and resourceful and productive. Ideally, somebody making $400k annually--or more than 99% of the population--should be smarter and more resourceful and productive than 99% of the population. Maybe the ideal scenario doesn't always work out, but still, I would expect people with incomes in the top 1-2% would at least be pretty damn smart and productive and resourceful the overwhelming majority of the time. But apparently people who make this much money are struggling, not sure how to make ends meet on a paltry $250,000 income.

Yet, oddly enough, there are plenty of people in this country (half of them in fact), who manage to make ends meet on about 1/5 or less of what these top earners make. Look, if I've got a choice between two engineers for a project, and one of them can meet the project specifications with 1/5 of the resources required by the other one, I know who I believe is the smarter engineer. Yet in whatever bizarre form of capitalism we're practicing in this country, we seem to have rewarded the people who are less intelligent and resourceful.

As somebody working on building my own business, I want to believe that success comes through intelligence and resourcefulness and creativity and hard work. But it appears people at the high end of the income scale are seriously lacking in most of those qualities. If this is how capitalism works in America, maybe socialism is worth a try after all...