The ranks of the working-age poor in the United States
climbed to the highest level since the 1960s as the recession threw
millions of people out of work last year, leaving one in seven Americans
in poverty. The overall poverty rate climbed to 14.3 per cent, or 43.6
million people, the Census Bureau said yesterday in its annual report on
the economic well-being of US households. Gulfnews.com
While 43.6 million Americans live in poverty, the richest men of finance sure are getting pissy. First Steve Schwartzman,
head of the Blackrock private equity company, compares the Obama
administration's effort to close billionaires' tax loopholes to "the
Nazi invasion of Poland." Then hedge fund mogul David Loeb announces
that he's abandoning the Democrats because they're violating "this
country's core founding principles" -- including "non-punitive taxation,
Constitutionally-guaranteed protections against persecution of the
minority, and an inexorable right of self-determination." Instead of
showing their outrage about the spread of poverty in the richest nation
on Earth, the super-rich want us to pity them?
Why are Wall Street's billionaires so whiny?
Is it really possible to make $900,000 an hour (not a typo -- that's
what the top ten hedge fund managers take in), and still feel aggrieved
about the way government is treating you? After you've been bailed out
by the federal government to the tune of $10 trillion (also not a typo)
in loans, asset swaps, liquidity and other guarantees, can you really
still feel like an oppressed minority?
You'd think the Wall Street moguls would be thankful. Not just
thankful -- down on their knees kissing the ground taxpayers walk on and
hollering hallelujah at the top of their lungs! These guys profited
from puffing up the housing bubble, then got bailed out when the going
got tough. (Please see The Looting of America for
all the gory details.) Without taxpayer largess, these hedge fund
honchos would be flat broke. Instead, they're back to hauling in obscene
These billionaires don't even have to worry about serious financial
reforms. The paltry legislation that squeaked through Congress did
nothing to end too big and too interconnected to fail. In fact, the
biggest firms got even bigger as they gobbled up troubled banks, with
the generous support of the federal government. No bank or hedge fund
was broken up. Nobody was forced to pay a financial transaction tax.
None of the big boys had a cap placed on their astronomical wealth. No
one's paying reparations for wrecking the US economy. The big bankers
are still free to create and trade the very derivatives that catapulted
us into this global crisis. You'd think the billionaires would be
praying on the altar of government and erecting statues on Capital Hill
in honor of St. Bailout.
Instead, standing before us are these troubled souls, haunted by visions of persecution. Why?
The world changed. Before the bubble burst, these people walked on water.
Their billions proved that they were the best and the brightest -- not
just captains of the financial universe, but global elites who had
earned a place in history. They donated serious money to worthy causes
-- and political campaigns. No one wanted to mess with them.
But then came the crash. And the things changed for the big guys --
not so much financially as spiritually. Plebeians, including me, are
asking pointed questions and sometimes even being heard, both on the
Internet and in the mainstream media. For the first time in a
generation, the public wants to know more about these emperors and their
new clothes. For instance:
* What do these guys actually do that earns them such wealth?
* Is what they do productive and useful for society? Is there any
connection between what they earn and what they produce for society?
* Did they help cause the crash?
* Did these billionaires benefit from the bailouts? If so, how much?
* Are they exacerbating the current unemployment and poverty crisis with their shenanigans?
* Why shouldn't we eliminate their tax loopholes (like carried interest)?
* Should their sky-high incomes be taxed at the same levels as during the Eisenhower years?
* Can we create the millions of jobs we need if the billionaires continue to skim off so much of our nation's wealth??
* Should we curb their wealth and political influence?
How dare we ask such questions! How dare we consider
targeting them for special taxes? How dare we even think about
redistributing THEIR incomes... even if at the moment much of their
money comes directly from our bailouts and tax breaks?
It's true that the billionaires live in a hermetically sealed world.
But that doesn't mean they don't notice the riffraff nipping at their
heels. And they don't like it much. So they've gotten busy doing what
billionaires do best: using their money to shield themselves. They're
digging into their bottomless war chests, tapping their vast connections
and using their considerable influence to shift the debate away from
them and towards the rest of us.
We borrowed too much, not them. We get too much health
care, not them. We retire too soon, not them. We need to tighten our
belts while they pull in another $900,000 an hour. And if we want to
cure poverty, we need to get the government to leave Wall Street alone.
Sadly, their counter-offensive is starting to take hold.
How can this happen? Many Americans want to relate to billionaires.
They believe that all of us are entitled to make as much as we can,
pretty much by any means necessary. After all, maybe someday you or I
will strike it rich. And when we do, we sure don't want government
regulators or the taxman coming around!
Billionaires are symbols of American individual prowess and virility.
And if we try to hold them back or slow them down, we're on the road to
tyranny. Okay, the game is rigged in their favor. Okay, they got bailed
out while the rest of us didn't -- especially the 29 million people who
are jobless or forced into part-time work. But what matters most is
that in America, nothing can interfere with individual money-making.
That only a few of us actually make it into the big-time isn't a bad
thing: It's what makes being rich so special. So beware: If we enact
even the mildest of measures to rein in Wall Street billionaires, we're
on the path to becoming North Korea.
Unfortunately, if we don't adjust our attitudes, we can expect
continued high levels of unemployment and more people pushed below the
poverty line. It's not clear that our economy will ever recover as long
as the Wall Street billionaires keep siphoning off so much of our
wealth. How can we create jobs for the many while the few are walking
off with $900,000 an hour with almost no new jobs to show for it? In the
old days, even robber barons built industries that employed people --
steel, oil, railroads. Now the robber barons build palaces out of
fantasy finance. We can keep coddling our financial billionaires and let
our economy spiral down, or we can make them pay their fair share so we
can create real jobs. These guys crashed the economy, they killed
billions of jobs, and now they're cashing in on our bailout. They owe
us. They owe the unemployed. They owe the poor.
Dwight D. Eisenhower was no radical, but he accepted the reality: If
America was going to prosper -- and pay for its costly Cold War -- the
super-rich would have to pony up. It was common knowledge that when the
rich grew too wealthy, they used their excess incomes to speculate. In
the 1950s, memories of the Great Depression loomed large, and people
knew that a skewed distribution of income only fueled speculative booms
and disastrous busts. On Ike's watch, the effective marginal tax rate
for those earning over $3 million (in today's dollars) was over 70
percent. The super-rich paid. As a nation we respected that other
important American value: advancing the common good.
For the last thirty years we've been told that making as much as you can is just another way of advancing the common good.
But the Great Recession erased that equation: The Wall Streeters who
made as much as they could undermined the common good. It's time to
balance the scales. This isn't just redistribution of income in pursuit
of some egalitarian utopia. It's a way to use public policy to reattach
billionaires to the common good.
It's time to take Eisenhower's cue and redeploy the excessive wealth
Wall Street's high rollers have accumulated. If we leave it in their
hands, they'll keep using it to construct speculative financial casinos.
Instead, we could use that money to build a stronger, more prosperous
nation. We could provide our people with free higher education at all
our public colleges and universities -- just like we did for WWII vets
under the GI Bill of Rights (a program that returned seven dollars in
GDP for every dollar invested). We could fund a green energy Manhattan
Project to wean us from fossil fuels. An added bonus: If we siphon some
of the money off Wall Street, some of our brightest college graduates
might even be attracted not to high finance but to jobs in science,
education and healthcare, where we need them.
Of course, this pursuit of the common good won't be easy for the
billionaires (and those who indentify with them.). But there's just no
alternative for this oppressed minority: They're going to have to learn
to live on less than $900,000 an hour.