Bernie Madoff recently had some choice words about the politicians he thinks are spreading “socialism” and “wealth distribution,” while billionaires Tom Perkins and Ken Langone both likened critics of oligarchic wealth to Nazis. Perkins and Langone should take heed: It’s a bad sign when you sound like Madoff. It’s even worse when he sounds more reasonable than you.
Langone’s comments were particularly incoherent. “If you go back to 1933, with different words,” said Langone of populist rhetoric, “this is what Hitler was saying in Germany.”
With “different words”? What does that even mean?
At least Madoff skipped the Hitler comparisons when he was interviewed recently for Politico. But in other ways he sounded strikingly like the others: opinionated, ill-informed, and yet accustomed to being listened to in a deferential way. That’s what comes when you’re tapped for campaign contributions by people who then feel obligated to ask your opinion.
“Madoff was constantly hounded by politicians,” writes Politico interviewer ML Lee, “from local to federal candidates. He insisted that he found it all off-putting — socializing at cocktail parties in the city, attending swanky fundraisers in the Hamptons, and feeling obligated to cut checks.”
Federal Election Commission records show that most of the beneficiaries of Madoff’s largesse were Democrats in the Wall Street “centrist” mold, including senators Chuck Schumer and Hillary Clinton. Madoff trashed some of the politicians he backed, which I’ve found is typical of his former class. Give some representatives or senators a few bucks, and pretty soon you’re treating them like particularly slow-witted underlings. Langone, who describes himself as a devout Catholic, even felt free to lecture Pope Francis about the Holy Father’s criticism of the ultra-wealthy.
Madoff addressed his complaints to President Obama, saying he was “terribly disappointed” because “(Obama’s) policies are too socialist.” The Obama administration rescued Wall Street, saved the stock market, and has yet to prosecute even a single big-bank executive. And yet these days the “socialist” refrain is common in billionaire circles.
That’s gratitude for you.
Madoff also had choice words for New York City Mayor Bill de Blasio, saying “I’m not a great fan of redistribution of wealth.” But what, exactly, is this Soviet-style “redistribution” of which Madoff speaks? De Blasio’s proposed a tax increase of slightly more than half of one percent for income above $500,000 per year. The Independent Budget Office, a city agency, estimates that it would cost New Yorkers earning between half a million and a million dollars an average of $973 per year.
That’s hardly like the Red Army coming to seize the family dacha.
Why have the hyper-wealthy become so hypersensitive? I agree with Will Bunch: There is a real element of “panic” fueling these incoherent and offensive comments. I also agree with Bunch’s observation that the Nazi comparisons are “more than a tad silly, since …Hitler and the Nazis were about as pro-capitalism and pro-large corporations as they come.”
Home Depot co-founder Ken Langone is a hardworking, smart businessman, and there’s nothing in his background to suggest he’s prone to either panic or silliness. And yet here he is, displaying considerable amounts of both. It’s not as if Langone and his peers have persevered through tough times. As Bunch observes (his essay is well worth reading), CEO pay has risen from an average of 42 times as much as an average workers’ income in 1980 (shortly after Home Depot was founded) to 380 times as much in 2012.
These are particularly rewarding times to be wealthy, what with runaway wealth accumulation at the top and actual tax rates for the rich and corporations near record lows. And yet the complaints keep coming. Investor Perkins compared criticism of his ex-wife’s San Francisco hedges (the lawn kind, not the financial kind) to “Kristallnacht.” Hedge-funder Steve Schwarzman compared being taxed according to the same tables used for cops, nurses, and teachers to “Hitler invading Poland.” Home Depot co-founder Bernie Marcus said that making it easier for unions to organize is “how a civilization disappears.”
Madoff’s comments are right in line with these remarks – and in fact are considerably more restrained. And Madoff’s political arc is a common one: from Wall Street Democrat and Obama supporter in 2008 to defender of the supposedly persecuted plutocratic class in recent years.
The financial crowd gave more than twice as much to Mitt Romney in 2012 as they did to the president. That’s no surprise. Romney mocked regulation, maligned the majority, was ticked off about taxes. He understood them.
But Obama hardly ran as an insurgent. The president collected $20.4 billion from the “finance, insurance, and real estate” sector – in their words, the rentier class. True, that figures pales behind Romney’s $59 billion, but it’s certainly more than a real socialist could have collected.
There’s more than fear at work among these billionaires. There’s rage, too. These are people who are unaccustomed to hearing “no.” And many of them got where they are because they possess an overwhelming and insatiable drive for more.
That may be why so many of them believe, as Langone does, that their opponents are driven by “envy and jealousy.” Those emotions, transmuted into competitiveness, is how many of them reached the top of the heap. They may find it impossible believe that many of us are content with the financial success of others – as long as they don’t cheat the system, corrupt the political process, or accumulate their wealth in a socially harmful way. But surely even the most thin-skinned among them can recognize that criticisms of Madoff, at least, aren’t driven by envy.
And if there can be legitimate criticisms of one billionaire, surely there can be legitimate criticisms of others.
Madoff seems bitter about the fact that he’s been singled out for prosecution. He insists that there are other schemers like himself out there, but that regulators lack the resources to find them. As for big-bank executives, Madoff says that “These people were breaking the law and nobody was convicted.” These guys got away with it, Madoff is saying, while I got caught.
Now that’s envy.
Madoff doesn’t sound exactly like his former peers. Now that he can no longer make money, he’s decided that financial regulations are a good idea. And the big-donor campaign system turns him off. Presumably many other billionaires would experience similar insights once they got a little distance from the system that enriched them. But by then it could be too late.
Madoff seems particularly frustrated that nobody at JPMorgan Chase has been indicted for collaborating with him while it was handling his funds. Others have wondered, too. In a settlement reached this January, it was announced that JPM will pay more than $1.7 billion for its role in the Madoff case under a “deferred prosecution agreement.”
There were no individual prosecutions in that case, however, despite the fact that another bank warned JPM of potential irregularities – in 1996.
Bunch thinks the hysteria’s been triggered because “the billionaires of America” are “about to lose.” But there’s no sign of that anywhere. Even Obama’s overly mild attempts at reform are being beaten back by intransigent Republicans. Corporate-Democratic attack dogs like New York Governor Andrew Cuomo are doing their best to gut de Blasio’s reasonable reforms.
Wages have stagnated. Long-term unemployment is an ongoing emergency. Many Americans, perhaps most, are facing a retirement crisis. Millions are only one or two paychecks away from ruin. Poverty rates have soared. In the midst of misery, more and more of the nation’s wealth is being captured by the top 0.1 percent of earners.
And yet, some of the most powerful and wealthy people in America are feeling persecuted. I find it hard to be sanguine about it. The Langone/Perkins crowd is powerful, angry, afraid and unrepentant. That doesn’t bode well – for them or anyone else. Many of these angry billionaires have earned their wealth through intelligence and hard work. They’ve also been lucky, and have been aided by the society whose citizens they now castigate in the harshest terms.
We’ve seen their fear and their fury. Now where is their gratitude? It’s time for them to stop listening to their inner Madoffs and turn to their consciences instead.