Apparently Paul Sullivan, the New York Times Rich People Beat reporter who wrote about the problems of the super-rich a couple of weeks ago, wasn’t prepared for the waves of derision I predicted here. He’s written another column expressing sorrow that ordinary people not only don’t care about the problems of the super-rich, they are downright angry.
The vehemence in these e-mail messages made me wonder why so many people were furious at those who had more than they did. And why are the rich shouldering the blame for a collective run of bad decision-making? After all, many of the rich got there through hard work. And plenty of not-so-rich people bought homes, cars and electronics they could not afford and then defaulted on the debt, contributing to the crash last year.
Let me explain, Mr. Sullivan. No one is angry at anyone because they are wealthy. People are angry because of the damage the rich and their minions on Wall Street and K Street and in the Bush White House have inflicted on the political and economic system. These people changed the system to increase their profit at the expense of the dreams of average Americans.
They weren’t satisfied with the normal returns from the ordinary business of the country, new businesses, new processes, education and growth for the benefit of all of us. No. They gutted the regulatory structures and the tax system, reaping a huge unearned windfall. They took the capital accumulated in their hands from the sweat of the workers and invested it in other countries, putting millions out of work. They changed the rules to let them import educated foreigners to drive down the wages of middle class Americans. They took all the profits themselves, increasing wealth inequality to pre-Depression levels, as this infuriating chart shows. They left nothing for the workers and the middle class. Anger is the least they can expect.
In his first article, Sullivan justified this piracy with trickle-down economics. This time he offers even an even lamer explanation as to why we should care: the rich can’t fund a scholarship or new paintings at the Metropolitan. He wants us to care because so many of the rich are motivated by noblesse oblige, and might toss a few coins into the cups of us beggars on the street. This is the kind of argument only a real elitist would offer. It is particularly ridiculous because it is offered as an excuse to cover the thing the rich really worry about: tax increases:
The first is that any tax increase has a direct impact on the income they withdraw from their portfolios. More money going to the government means less to live on. “They’re very concerned about taxes going up,” said William Woodson, managing director at the Family Wealth Management group at Credit Suisse. “The percent that goes to taxes is significant if it’s a 15 percent capital gains vs. 25 percent capital gains. It makes a big difference.”
Yes it does make a difference. We are running huge deficits and borrowing the money. We pay interest on the borrowings. Who is buying that debt? Rich people. They not only don’t want to pay taxes, they want us to pay them interest for the privilege of running deficits which would not even exist if we had a fair tax structure.
Sullivan’s deep concern for the wealthy includes the fantastically rich people in the financial services industry:
“To revile the rich is to revile the American dream,” said Robert Clarfeld, president of the wealth management firm Clarfeld Financial Advisors.
Mr. Clarfeld, who manages $3 billion largely for financial services executives, takes exception to lumping all of Wall Street together. He said his clients felt that they had worked hard and honestly for their money and were now being unjustly judged alongside those who did not.
Let me make this crystal clear: selling trash securities, gaming trading systems, and insider trading isn’t hard work. It isn’t even work. Selling trash interest rate swaps to Italian cities, and to Jefferson County, Alabama, and misusing swaps to destroy customers isn’t honest. It’s corrupt.
Sullivan is concerned about the pajama-clad angry people:
if you spend your free time obsessing about the rich, you could end up in worse shape emotionally, personally and financially. “People who get caught up in this paranoia spend all night reading these blogs, and six months later they haven’t done anything to better themselves,” Dr. Dammann said. “Even if they’re right, there is a lot of wasted energy put into this. They need to look at the mistakes they’ve made in their life.”
Dammann bills himself as a Manhattan psychoanalyst. He probably runs a Castle Practice, where he treats people as out of touch with reality as he is.
Let’s call this what it is: class warfare. We are fighting uphill, as Sullivan’s propaganda pieces show. We will be fighting uphill until enough people realize that the position and status of too many rich people is the result of cheating, not merit.