Winter is here, and Christmas is two days away. For many, winter's arrival and the year's end signals a time for reflection on how we have lived our lives, our current circumstances and what life might hold in store for us. I recently quoted Sheldon Danziger, a public policy professor at the University of Michigan who specializes in poverty, in my post Benevolent Space Aliens Visit Earth — We're Saved! According to Sheldon, prospects for the 147 million Americans who live within 200% of the poverty line are dismal.
If some of those millions of working and not-working Americans are indeed reflecting in a serious way on their prospects now that the holidays have arrived, if they aren't in denial, they will no doubt arrive at the same conclusion.
For the super-rich, there are no such troubling thoughts. This is the best of all possible worlds. It's All Good. Well, OK, there is a nagging problem. This Hopey-Changey guy, in his craven, insincere attempt to win re-election, keeps talking about soaking the rich, especially the super-rich. Let's face it, these rich people are saying, this guy is completely out of control. Something's gotta be done about him.
So the rich must fight back against the pernicious superstition that it's not a Good Thing that the cumulative wealth of the Forbes 400 was $1.54 trillion or roughly the same amount of wealth held by the entire bottom fifty percent of American families. That was in 2007, and no doubt the situation has deteriorated since because house prices have collapsed. Since the value of your house—if you have one, even if you are mortgaged to the hilt—is the principal source of wealth for the majority of Americans, the staggering wealth gap is surely much worse in 2011. See my recent post The Wal-Mart Fortune In The New Gilded Age.
In a recent story Indignant rich round on protest movement, the UK newspaper the Financial Times reported on the desperate fight of the super-rich to defend their super-richness and all that is Holy in America.
In the face of popular fury, political invective and protest encampments on their doorsteps, the rich are fighting back in America’s new bout of class warfare.
Some of the high-profile rich, including Steve Schwarzman, John Paulson and Jamie Dimon, have sought to define the terms of a debate that will be central to next year’s presidential campaign...
But like the disparate Occupy Wall Street movement, the rich employ a variety of tactics in their defence. One is to criticise the divisive tone of the debate itself as something that violates traditional American values. Leon Cooperman, [pictured left], a hedge fund manager and Goldman Sachs veteran, last month attacked the populist tactics of the president in an open letter widely circulated on Wall Street.
[My note: follow the link cited in the text to read Mr. Cooperman's letter.]
Yes, this "class warfare" discussion is just so divisive, especially to super-rich persons like Mr. Cooperman. Can't we all just get along? After all, traditional American values are at stake, a set of values also known as The American Dream.
Wall Street's favorite journalist Andrew Ross Sorkin reported on this divisive class warfare in It’s Tone, Not Taxes, a Tycoon Tells the President.
Leon Cooperman, a 68-year-old Wall Street veteran, says he is for higher taxes on the wealthy. He would happily give up his Social Security checks. He voted for Al Gore in 2000. He says the special treatment of investment gains, or so-called carried interest, for private equity and hedge fund managers is “ridiculous.” He says he even sympathizes, at least to some extent, with the Occupy Wall Street protesters.
And yet, Mr. Cooperman, a man with a rags-to-riches background who worked at Goldman Sachs for more than 25 years in the 1970s and 1980s before starting his own hedge fund, Omega Advisors, which has minted him an estimated $1.8 billion fortune, is waging a campaign against President Obama...
Mr. Cooperman’s complaint has less to do with the substance of taxing the wealthy than it does the president’s choice of words in promoting it, an emphasis that he says is “villainizing the American Dream.”...
“I came from nothing,” he said, explaining how he grew up in the Bronx and went to P.S. 75. “I have lived the American Dream. I don’t want to be constantly attacked.”
Although there is no hope for the 147 million Americans living within 200% of the poverty line, we have found the embodiment of the American Dream in Mr. Cooperman. And now, most importantly, we know precisely what the American Dream is — work for Goldman Sachs for over 25 years, and then start a hedge fund and "mint" an estimated 1,800,000,000 dollars. For those of you who were wondering what the American Dream is exactly, well, now you know.
Back to the Financial Times—
Others [among the super-rich] point to their contribution to the economy. In October, John Paulson, the hedge fund manager who made billions betting that large numbers of subprime borrowers would default on their mortgages, issued a statement claiming that his hedge fund Paulson & Co has created over 100 high-paying jobs in New York City since it was founded.
Far be it from me to criticize Mr. Paulson—he should be in jail, of course—for his job creation efforts. His hedge fund has created 100 high paying jobs in New York City since its founding!
And finally there was this.
“The top one per cent of New Yorkers pay over 40 per cent of all income taxes, providing huge benefits to everyone in our city and state,” [one hedge fund manager] said, concluding, “instead of vilifying our most successful businesses, we should be supporting them and encouraging them to remain in New York City and continue to grow.”
Invocation of the rags to riches tale of the American dream also features heavily. Mr Cooperman is the son of a plumber.
Anthony Scaramucci, head of SkyBridge, a fund of hedge funds, traced his path from blue collar roots to Wall Street in his autobiography, Goodbye Gordon Gekko: how to find your fortune without losing your soul.
“The 99 per cent”, he says, “really want to be part of the 1 per cent”.
I might add that the wealthiest New Yorkers pay over 40% of the taxes because they've got most of the money, but we're not allowed to say that kind of thing; it just makes too much sense. Instead, let's address a much more important point made just above.
Yes, Mr. Scary-Mucci, Envy is our problem, not Poverty.
That's what the rest of us want, to be part of the 1%. We all want to be just like you.
Bonus Video — Good King Wenceslas
Therefore, Christian men, be sure,
Wealth or rank possessing,
Ye who now will bless the poor
Shall yourselves find blessing
Excellent. Taibbi was all over this topic yesterday as well (http://www.rollingstone.com/politics/blogs/taibblog/a-christmas-message-from-americas-rich-20111222). Worth a read if you haven't seen it.
Posted by: Brian M | 12/23/2011 at 11:47 AM