Journalists Matt Taibbi and Chrystia Freeland join Bill Moyers to discuss how the super-rich have willfully confused their self-interest with America’s interest.
In her recent article appearing in The New Yorker, “Super-Rich Irony,” Chrystia Freeland relates the growing antagonism of the super-rich for President Obama.
This is the group that has benefited most from the winner-take-all economy: the 0.1 per cent, whose share of the national income was 7.8 per cent in 2009, according to I.R.S. data.
The economists Emmanuel Saez and Thomas Pilketty have found that ninety-three per cent of the gains during the 2009-10 recovery went to the top one per cent of earners. The top 0.01 percent captured thirty-seven percent of the total recovery pie, with a rebound in their incomes of more than twenty per cent.
But, when, in June, 2011, in the middle of the debt-ceiling battle, Obama urged America’s millionaires and billionaires to pay their fair share, instead of supporting the President, the super-rich began to criticize him publicly with charges of “class warfare,” compared Obama to Hitler, and shifted their support to Romney.
America’s super-rich feel aggrieved because they believe that they have worked hard for, earned, what they have, while other people are freeloading. Foreshadowing Romney, Leon Cooperman, a billionaire hedge-fund manager, said
“It’s a question of tone. The President makes it sound like the problems of the ninety-nine per cent are caused by the one per cent, and that’s not the case…Our problem, frankly, is as long as the President remains anti-wealth, anti-business, anti-energy, anti-private-aviation, he will never get the business community behind him. The problem and the complications is the forty or fifty per cent of the country on the dole that support him.”
The super-rich believe they are the winners. They feel that they deserve what they get because they are the “job creators.” To be prosperous, one must be fiscally disciplined. They have won the competition in the free market, therefore they must be the most disciplined and the most morally worthy, the ‘best’ people. They deserve to win. If you are not prosperous it must be because you are undisciplined – which is itself a form of immorality – and so you deserve your poverty.
In contrast to the 50’s, business executives, people at the top now believe in Ann Rand’s philosophy that they are the wealth creators and they should get all the breaks and advantages, whereas everybody else is a parasite living off them.
Freeland cites Nick Hanauer, a Seattle entrepreneur and venture capitalist who was one of the first investors in Amazon. In a book published this year, he argues that since the Reagan era American capitalists have enjoyed a uniquely supportive set of ideological, political, and economic conditions. Their personal enrichment came to be seen as a precondition for the enrichment of everyone else. Lower taxes for them were a social good, rather than a selfish perk.
“If you are a job creator, you fifteen-per-cent tax rate is righteous. If you aren’t, it is a con job. The idea that the rich deserve to be rich is a very comforting idea if you are rich.” Referring to Obama’s “You didn’t build that” remark, Hanauer said that “the notion that you built it yourself is what you need to believe to feel comfortable with yourself and your desire not to pay too much taxes.”
Since Reagan there has been a view that we should all listen to the business person. We should all accept what he – all are male – thinks how society should be ordered because he, after all is the hero of our times, the hero of the capitalist narrative.
Obama’s underlying point is that American capitalism is not working the way it was in the ’50s; we are not seeing a rising tide lift all boats. Instead we are seeing the incomes of the people at the very top take off. Their economic fortunes are actually disconnected from most everybody else.
The old Henry Ford model where you needed the middle class to be well paid too has broken down. And to actually state that is profoundly threatening because it starts to break down this equation of the size of my bank account isn’t just good for me, it’s a manifestation of my civic contribution. My wealth = my virtue.
Obama is challenging this notion of the successful businessman as the hero and the driver of the American narrative. This is a big challenge that accounts for the disproportionate emotional response. Pointing out that capitalism creates the inequality is an existential threat and connects the ultra-rich with rest of population.
Romney’s campaign is saying “I’m a successful businessman so I will make a good president,” and Obama is saying “You know what? I don’t think that that equation works and is automatic anymore.” The plutocrats are not wrong to detect a very powerful ideological challenge.
But, Ms. Freeland observes that there is no credible counter-movement; no one is offering sufficiently compelling alternatives and solutions.
“My argument is we are living through equally profound economic transformations and just trying to rehash and re-tinker with the twentieth century institutions I don’t think is enough…let’s at least see the new ideas. We need to realize the ’50s are not coming back. So let’s really face the facts of how the world economy works and really come up with what needs to be the political and social response.”