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Showing Original Post only (View all)Why Are the Super-Rich So Angry? [View all]
The past few years have been very good to Stephen Schwarzman, the chairman and C.E.O. of the Blackstone Group, the giant private-equity firm. His industry, which relies on borrowed money, has benefitted from low interest rates, and the stock-market boom has given his firm great opportunities to cash out investments. Schwarzman is now worth more than ten billion dollars. You wouldnt think hed have much to complain about. But, to hear him tell it, hes beset by a meddlesome, tax-happy government and a whiny, envious populace. He recently grumbled that the U.S. middle class has taken to blaming wealthy people for its problems. Previously, he has said that it might be good to raise income taxes on the poor so they had skin in the game, and that proposals to repeal the carried-interest tax loopholefrom which he personally benefitswere akin to the German invasion of Poland.
Schwarzman isnt alone. In the past year, the venture capitalist Tom Perkins and Kenneth Langone, the co-founder of Home Depot, both compared populist attacks on the wealthy to the Nazis attacks on the Jews. All three eventually apologized, but the basic sentiment is surprisingly common. Although the Obama years have been boom times for Americas super-richrecent work by the economists Emmanuel Saez and Thomas Piketty showed that ninety-five per cent of income gains in the first three years of the recovery went to the top one per centa lot of them believe that theyre a persecuted minority. As Mark Mizruchi, a sociologist at the University of Michigan and the author of a book called The Fracturing of the American Corporate Elite, told me, These guys think, Were the job creators, we keep the markets running, and yet the public doesnt like us. How can that be? Business leaders were upset at the criticism that followed the financial crisis and, for many of them, its an article of faith that people succeed or fail because thats what they deserve. Schwarzman recently said that Americans always like to blame somebody other than themselves for a failure. If you believe that net worth is a reflection of merit, then any attempt to curb inequality looks unfair.
Thats not how its always been. A century ago, industrial magnates played a central role in the Progressive movement, working with unions, supporting workmens compensation laws and laws against child labor, and often pushing for more government regulation. This wasnt altruism; as a classic analysis by the historian James Weinstein showed, the reforms were intended to co-opt public pressure and avert more radical measures. Still, they materially improved the lives of ordinary workers. And they sprang from a pragmatic belief that the robustness of capitalism as a whole depended on wide distribution of the fruits of the system.
Similar attitudes prevailed in the postwar era, as Mizruchi has documented. Corporate leaders formed an organization called the Committee for Economic Development, which played a central role in the forging of postwar consensus politics, accepting strong unions, bigger government, and the rise of the welfare state. At the very top, corporate leaders were much more moderate and pragmatic, and, because thats where national politics were, they were very influential, Mizruchi said. Corporations supported policies that might have been costly in the short term in order to strengthen the system as a whole. The C.E.D. called for tax increases to pay for the Korean War and it supported some of L.B.J.s Great Society. As Mizruchi put it, They believed that in order to maintain their privileges, they had to insure that ordinary Americans were having their needs met.
http://www.newyorker.com/talk/financial/2014/07/07/140707ta_talk_surowiecki
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Probably ninety percent of the top five percent have had to be absolutely perfect
truedelphi
Jul 2014
#10