If the 1% Wants Class Warfare, Maybe It's Time to Start Fighting Back

What Tom Perkins and Co don’t know can only make the rest of us stronger

The White House administration official who proposed taking on "income inequality" as the dominant theme of Obama's second term must have thought the move was at least halfway clever: I mean, try as the Right may to argue against the administration's preferred mechanisms to undo income inequality, honestly, what kind of jerk would straight-up defend it?

Well, it turns out there are two kinds. Call them the emotional alarmist and the pseudo-scientific apologist. Both variations were on display in the past week, in the form of zillionaire Tom Perkins and economist-to-the-zillionaires, former Romney adviser Greg Mankiw. Both Perkins and Mankiw are correct to be worried about how the widening income gap might inspire more class consciousness. They're just wrong about which side is the underdog.

Perkins, the venture capitalist and emotional alarmist, has been in the news quite a bit lately, due to his Wall Street Journal letter-to-the-editor comparing agitation about income inequality to declaring war on the wealthy. Specifically, declaring World War II: Perkins warned that "'progressive' radicalism" is the "descendent" Kristallnacht.

The ensuing uproar had Perkins rethinking his vocabulary but not backing down from the imagery. "Kristallnacht should never have been used," he said in the splashy aftermath of the assertion. "I regret the use of that word. I don't regret the message at all." In other words: I'm sorry I used a term that refers to the early stages of the Holocaust, but we're in the early stages of a Holocaust.At a Fortune magazine event last Thursday that took its name from the larger point of his original screed - "The War on the 1%" - he went a step further. Higher taxes, he said, will lead to the "economic extinction" of the 1%. So there you go: he didn't mean genocide, he meant something worse. At least as far as Tom Perkins is concerned.

The use of a Nazi metaphor is so provocative, and apologizing for it is so vital, that it's easy to lose sight of what else is wrong with the Perkins analogy: it's not the rich who are being attacked; they are now the ones doing the attacking. The metaphor was terrible - and he got it backwards anyway. There is, for instance, already one side of his imagined conflict living in ghettos. Even more to the point, there is not an epidemic of rich people dying younger and younger or becoming sicker and sicker. Would it comfort Tom Perkins to know that the "life expectancy gap" in America is widening even more quickly as that of income? In 1980, the richest Americans could expect to live about 1.8 years longer than poorest; by 2000, they could expect to live 4.5 years longer, a jump of almost 40 percent. Meanwhile, income inequality has increased by 25 percent.

This is good news for the apocalyptic scenario of super-rich America! Perkins and his compatriots won't have to fight off the poor; they'll just have to wait them out. Far from facing "economic extinction", the 1% will just have even more trouble finding good help.

Perkins's insouciant ignorance when it comes to the basic reality of poverty extends beyond the physical wellbeing of the poor and straight into their finances. Which is odd for a financier, but then again Tom Perkins has already proven himself, in less than one month out in public and likely even longer, to be not much of thinker. His alarmism about "high taxes" as the engine of destruction of the upper classes doesn't square well with current taxes on the top 1% being the second lowest in 30 years. His belief that "50 percent of registered voters don't pay taxes" is just plain stupid; when all federal, local and state taxes are factored in, the bottom fifth of American households winds up paying about 16% of their income in taxes.

To be fair, I assume it's been many, many years since Perkins has seen a sales receipt or a payroll stub. One gets the sense that, in general, Perkins does not spend a lot of time around people who aren't in the top 1% - though his optimism about what such a commingling might bring is almost touching. As if to prove just how dear the Nazi metaphor is to his heart, Perkins returned to it again at the Fortune talk on Thursday night, though he attempted a positive spin; he implied that perhaps the poor's animosity toward the rich is just a big misunderstanding: "The typical German had never met a Jew," he explained.

The moderator helpfully completed the thought: "So perhaps the typical Occupy protester has never met someone who rides a Google bus." (Personally, some of my best friends are rich.) Let's say this is the case. Who do you think would gain sympathy from whom in that scenario?

My money is on an alliance between the Occupy protester and the Google bus rider against Perkins.

With his six-pack of Rolexes and absurd vanity projects (hello, bad romance novel!), Perkins is rather easy to vilify, which is why he needs people such as Mankiw, our pseudo-scientific apologist, a class warfare Eddie Haskill, if not Neville Chamberlain. Mankiw's column in Sunday's New York Times did not address class warfare directly - he just denied there was a conflict at all. You see, the rich deserve the money they make! What's more, because Robert Downey Jr makes a lot of money and people still like him, well, there you go.

I'm not mangling Mankiw's argument in that last bit. Go read the piece. He bases his entire argument on two points: 1) People like Robert Downey Jr - and the 50 Shades of Grey guy, and LeBron James - even though he makes a lot of money; and 2) most CEOs make a lot of money, so what they do must be very valuable and worth a lot of money. Ergo: people should like CEOs!

First of all, when Mankiw assumes that "people....are similarly unperturbed" about the wealth bestowed upon Downey, the Grey author or James, I think he must not talk to very many people. I suspect his own social circle tends to the Tom Perkinses of the world and not the Naomi Kleins, but surely there are some wealthy Cavaliers or Celtics fans out there.

Second of all, when big thinkers sit down to ponder why class animosity exists, "It shouldn't" isn't much of an answer. People are angry - and maybe people should be angry. Both Perkins and Mankiw seem to think that the poor (or just the not-rich!) resent the wealthy simply because they have so much. They think we resent the number of zeros in their paychecks. Of course not. We resent that those zeros come out of ours.

Mankiw asks the simplistic question: Are CEOs so valuable as to be worth their exorbitant paychecks? He answers it perhaps even more simply, by cherry-picking famous people. But the question on most people's minds is simpler still, and yet somehow too difficult for the CEOs and their enablers to comprehend: Am I so expendable as to be worth such a small paycheck ... or no paycheck at all?

To the extent that income inequality is a threat to the rich, it's not because they are so wealthy - at some point, the wealth of the most wealthy just becomes absurdly unimaginable anyway. No, it's because the wealth of the super-rich is just so damn far away, without any rungs in the ladder between, no assistance for that leap of faith that allows those who struggle to hope their struggles can cease.

The first casualty of the class war won't be the "economic extinction" of the super-rich; it will be the disappearance of the middle class.

Income inequality's growth is as staggering along the sides of the middle as it is at the edges of the graph, if not more so. Between 2010 and 2012, the income of the middle 60% - six-zero - of Americans declined by a greater percentage than that of the poorest 20 percent. In 1970, the middle 60 percent took home 53% of the nation's income, and now it takes 45. Today, the upper range of the middle 60% of the population's income is around $100,000 - just under the salary of a typical Google employee.

The flattening of the middle class squeezes a very few to the ranks of the wealthy; most end up alongside the poor. Human empathy might stir our unlikely seatmates on the Google bus, and so will the growing awareness of the middle and upper-middle class that their own positions are precarious.

Mankiw's lead-off speculation about Downey's popularity (disclaimer: I, too, think he's pretty rad) pivots specifically off his $50m Avengers payday. But I'm guessing he didn't see the movie, since the character Downey plays is, himself, a multi-billionaire, albeit one a lot more interesting and layered than Tom Perkins.

An alcoholic conflicted about what he owes the world (after making his fortune in arms dealing) and beset by a hubris-tempting ego, Tony Stark is a literary figure whose moral compromises are an intentional investigation of the very injustices Mankiw waves off. In the end, he does the right thing, which almost never includes laying people off or transferring manufacturing jobs overseas. He's also famous for a single retort: "Patriotism doesn't automatically equal conservatism". And, for what it's worth (ahem), he doesn't take a paycheck. Let's put Stark in that conversation with the Occupy protester and the passengers on the Google bus.

I'm starting to worry this fight won't even be fair.

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