I finally got around to reading, as opposed to reading about, billionaire Tom Perkins' Wall Street Journal rant about "the progressive war on the American one percent, namely the 'rich.'" I was under the impression it was an "op-ed" but the header calls it a letter, and it is fairly brief, weighing in at less than 200 words. It cites a WSJ editorial "Censors on Campus" which is behind some kind of paywall and not obviously relevant. Much of what Perkins complains about is hard to gauge. I don't read the San Francisco Chronicle, but I'd be real surprised to find that his charge --"the demonization of the rich embedded in virtually every word of our local newspaper" -- is true of that or any elite media in the US. (I read enough of the New York Times to recognize that its reputation for liberalism is vastly exaggerated, and that any suggestion that it is even further to the left is plain ludicrous.) Nor do I have an opinion on whether Danielle Steel is a "snob" -- nor do I much care.
Most of the commentary concerns Perkins' attempt to liken the objects of his contempt to Nazis:
Writing from the epicenter of progressive thought, San Francisco, I would call attention to the parallels of fascist Nazi Germany to its war on its "one percent," namely its Jews, to the progressive war on the American one percent, namely the "rich." [ . . . ]
This is a very dangerous drift in our American thinking. Kristallnacht was unthinkable in 1930; is its descendant"progressive" radicalism unthinkable now?
I have several points in response. The first is arguable, but I believe that Kristallnacht was very "thinkable" in 1930. The Nazi Part wasn't in control yet but it was gaining traction and power, and anyone paying attention would have noticed both that Nazis were savagely anti-semitic and had built a paramilitary organization of thugs (the "brown shirts") who gloried in violence. Treblinka may have been unthinkable in 1930, but mobs breaking windows and beating up Jews? That sort of thing had happened periodically in Russia and Romania, and the argument that it couldn't happen in civilized Germany was belied by every advance of Hitler.
The second point shouldn't be controversial at all: there is no "progressive war on the American one percent" nor can there be for the simple reason that those most critical of extreme inequalities of wealth and power are very largely the same ones who are most conscientiously opposed to war -- indeed, to violence of any sort. "War" is a word we take very seriously, and war is something that no one should be subjected to, either as victim or as combatant.
You might object that the "war on poverty" and the "war on drugs" were liberal trivializations of the word. Both phrases, the former as farce and the latter as tragedy, derive from a deep misunderstanding of WWII as "the good war." Several aspects of the history conspired to lend a superficial "goodness" to the most horrific six years in human history: the Axis powers were naked aggressors bent on regional (if not world) domination, and the racist brutality of the regimes became all the more glaring when they occupied foreign lands; the US government at the time was the most fair-minded and equitable in US history, so they organized the war as a unifying and all-consuming public good; the US was allied with the Soviet Union, so for once the anti-imperialist left supported the war effort; the war acted as a giant jobs machine which lifted the US out of the Great Depression to unparalleled (and relatively evenly distributed) wealth. Americans were fully engaged in the war, their feelings of satisfaction and moral superiority reinforced by a deluge of propaganda, and it helped that nearly all of the destruction took place elsewhere.
Americans were so enthused by that "good war" that they invented a long "cold war" with their Soviet allies to sustain the high. The same liberals who led us through WWII architected the "cold war" but they lost their bearings, turning against labor abroad (and ultimately at home), allying with tyrants against democrats as well as socialists, trading in their anti-imperialism for visions of world hegemony, their commitment to human rights reduced to economic neoliberalism. During the early days "defense" was cited to justify everything from education programs to building interstate highways. So if you wanted to put an end to something, why not declare war on it?
One catch was that WWII set up a standard for absolute victory that proved impossible to maintain -- either in real wars like Korea and Vietnam, or in metaphorical wars like poverty and drugs, let alone in bizarre combinations like the "global war on terrorism." Another was that these wars, unlike WWII, weren't run by the sort of people who could make the nation feel united, nor the sort who could be depended on to treat a vanquished country right. This was basically why Peter Beinart argued that the "war on terror" could only be "won" if led by liberals, but liberals aren't actually much better, except inasmuch as they're reluctant to get involved. WWII looks good in retrospect less because the US occupation of Germany and Japan was competent and benign than because the former regimes had totally discredited themselves.
But another problem is that war isn't a good solution to much of anything. It is vastly destructive. It perpetuates cycles of hatred and revenge. But even the so-called victors, in the rare cases where there are any, are permanently stained and scarred by the experience. Nor are we only talking about physically and/or mentally maimed vets here. Many of those brought up on violence move to the right, toward parties that institutionalize privilege and order, readily projecting violence.
Of course, there have been instances of armed revolts against the rich: notably during the French and Russian Revolutions. Still, one wonders if either of those revolts would have been so violent had the anciens régimes not been so autocratic and so repressive themselves. Democratic systems are never so brittle: they bend rather than break, and in the past the US has accommodated several waves of anti-rich rhetoric without physical menace (unlike, say, civil rights advocates and labor organizers).
Indeed, take a look at actual program proposals to reduce inequality in the US. The most basic one is to restore or increase progressive income taxation. Do that alone, even at very high levels, and you may narrow the gap a bit, but you'll wind up with exactly the same 1% at the top. Increasing estate taxes might even legitimize the rich by making wealth correlate more with achievement than just fortuitous birthright: so that may shuffle the membership slightly, but there would still be a richest 1% -- just not quite as far out of whack as now. Changing laws and regulations on banking might also affect the composition of the top 1%. Same with intellectual property, which is really just a government-granted license to exorbitant rents. One might also seek to limit rent-seeking by enforcing or even extending antitrust laws -- one gain there would be more efficient markets.
Some of the things on that policy list were previously law before business interests started to effectively band their political power together to obtain special favors from the government. Others are new but not so far fetched, and should result in a healthier economy. On the other hand, I don't know of anyone who is seriously pushing for much more extreme measures, like massive expropriation of property, forced income levelling, or reassigning the children of the rich to random families to prevent them from having unearned advantages. Nor do I have the slightest sympathy for robbing the rich or vandalizing their property. Indeed, I worry that efforts to criminalize poverty will blow back against the relatively rich.
This actually gets to be a rather complicated question. It is easy to establish the facts of inequality, but much harder to understand what they mean. In particular, how does inequality translate into real differences for people? It turns out to be very easy to list many ways: money gets you more options for education and jobs; it cushions you against all sorts of economic hardships; it gets you better advice and therefore makes you more knowledgeable about how the world works, and how best to navigate it. Levelling incomes should make those ways more equal, but there is another approach: to offer services equitably regardless of income. If the costs of education were fully socialized, for instance, the rich would have no advantages over anyone else, nor the poor any disadvantages. Lots of things could work like that, and the more (and more important) that did, the less important it would be to equalize incomes.
So why don't the rich lobby for more social programs that equalize opportunity and such? Actually, they lobby hard for the opposite, and not just because they expect a payback in less taxes and therefore more take-home income. They want less social spending because they want the inequality they benefit from to be more valuable and more of an advantage. That's just one of many points where the wealth of the already rich increases at the expense of others -- overcharging rents, depressing the wage market, and outright theft are others. I suspect that the reason the superrich have gotten so defensive is that they sense they may really be in the wrong here.
Here's an example: Paul Krugman cites a Forbes report that the top 40 hedge fund managers in 2012 took home a combined $16.7 billion, which is to say about the same total income as 300,000 high school teachers. Now, teachers teach, and nearly everyone who has accomplished much of anything can point back to an inspirational teacher. (Even I can point back to a couple who inspired me to drop out of high school, but that's a diversionary story.) But what do hedge fund managers do? Well, they're very adept at finding the loose change that fell into cracks in your sofa, except that they work on bank accounts and they use a lot of leverage, so any loose change they find blows up into substantial amounts of money. They probably contribute some value to the economy in finding that loose change, but everything else is zero sum: they mostly move money from other bank accounts into their own. And they have enough political clout to get special tax treatment, so they wind up keeping more of it (minus their lobbying expenses, of course).
One thing you cannot conclude from this data is that there is any just relationship between what one does and how much one makes. You may decide it's not practical to try to regulate incomes, but if you have any desire to live in a society which considers itself fair, you need to do something to reduce the disparities between a socially useful and necessary job and one that is essentially useless but somehow pays 7,500 times as much. One thing you can do is to tax some of the excess away. The other is to reduce the practical advantages of the higher income. Neither approach has to get you all the way there. There will always be differences in how well various people manage their money, so no balancing act can be perfect. Nor need it be, since the intent is more to establish the sense that society and its economic system are basically fair -- i.e., that people don't have legitimate reasons to feel cheated. A schoolteacher may very well feel that intangible rewards of the job, such as the satisfaction of teaching others, may outweigh some difference in wages. But the more the practical difference, the harder that is to swallow.
One fair question is why billionaires have become so sensitive to affronts lately. There was, for instance, a flap a while back by Jamie Dimon complaining about something Obama had said -- odd, considering that Obama had allowed major bankers like Dimon to escape the meltdown unscathed, returning to profitability way ahead of the rest of the economy. Josh Marshall has a piece speculating on why:
Let me state the phenomenon as clearly as possible: The extremely wealthy are objectively far wealthier, far more politically powerful and find a far more indulgent political class than at any time in almost a century -- at least. And yet at the same time they palpably feel more isolated, abused and powerless than at any time over the same period and sense some genuine peril to the whole mix of privileges, power and wealth they hold.
There is a disconnect there that is so massive and glaring that it demands some sociocultural explanation. [ . . . ] I see three basic roots, though I don't think my list is exhaustive.
One is the simple but massive run up in the concentration of wealth itself over the past two generations. There's a slice of the population, whether it's the top 1% or .01% or whatever, that doesn't just have more stuff and money. The sheer scale of the difference means they live what is simply a qualitatively different kind of existence. That gulf creates estrangement and alienation, and one of a particular sort in a democracy where such a minuscule sliver of the population can't hope to protect itself alone at the ballot box.
Let's call this socioeconomic acrophobia.
A second is tied specifically to the 2008 financial crisis. The last 35 years or so have seen a period in which the celebration of wealth and the wealthy has been near the extreme end of the pendulum swing that has moved back and forth over the course of American history. Let's not distract ourselves, for the moment, with whether this view is right or wrong. It's a pendulum swing as old as America. In this view, the super rich, the founders and most successful entrepreneurs, not only wow us by their genius and success but are also seen as the people driving forward the society and economy and prosperity for everyone. That's a nice climate to be wealthy in. [ . . . ]
Quite simply, these were and are folks who just weren't used to public criticism. The whole "masters of the universe" mythology was basically, sure we're massively wealthy. But we're also the ones keeping the globe we all live on from spinning off its axis. So let us enjoy our Hamptons estates and our private jets in peace and we'll do our jobs and you do yours. The crossfire hurricane that ripped apart that social contract stung a lot.
And then there's the other really important variable in the equation. [ . . . ] That kind of scare is not easy to forget. Mix it with the need to run to the political class hat in hand and that ocean of animus from the public at large and you get the makings of a political and psychological toxicity that breeds Perkinsonian nonsense at the extreme end and more pervasively the sense of embattlement and threat verging on persecution complex that I described above.
It is that mix of insecurity, a sense of the brittleness of one's hold on wealth, power, privileges, combined with the reality of great wealth and power, that breeds a mix of aggressiveness and perceived embattlement.
Third there is the simple fact of Obama himself. By various criteria you could argue that before Obama America hadn't had a progressive president in decades. [ . . . ] President Obama is far from being a Franklin Roosevelt or Harry Truman. But he is a progressive and sees the economy and the larger society's claims on the very wealthy differently than a Bush or a Reagan. And again, that was just not something any of these folks had experienced before.
But again, the answer is the confluence of these events, no one of them. [ . . . ]
Put it all together and you get the climate in which someone like Perkins writes something as ridiculous as he did. As I said up top, his Holocaust analogy is so hyperbolic and ridiculous that he's getting dumped on by almost everyone. But we miss the point if we see this in isolation or just the rant of one out-of-touch douchebag. It is pervasive. The disconnect between perception and reality, among such a powerful segment of the population, is in itself dangerous.
It's rather painful for me to read anyone try to defend Obama as a progressive -- Paul Krugman, also responding to Kristallnacht Redux, takes his own shot at it here -- when the most you can say for Obama is that he's not yet prepared to ditch every achievement of the New Deal/Great Society democracy: he didn't even try to bring revenues back to pre-Bush levels, he made no effort to restore Carter-Glass, all he could come up with was Republican think tank proposals for health care and carbon dioxide limits and he couldn't get the latter passed, meanwhile he's let Republicans push him around on spending issues even at the cost of extending a recession, and I can go on and on. He hasn't moved a thing to the left, and doesn't even seem to be aware of that direction. It's only that the Republicans have exited stage right, complaining shrilly about all the distance between them.
Meanwhile, I still blame the cold war, when America allowed itself to become the world's standard bearer not for democracy or freedom but for capitalism. When the Soviet Union collapsed, following the Reagan"greed is good" decade, neoliberal hubris shot sky high, as did the neoconservative fantasy of the US as the world's sole hyperpower. Both delusions should have crashed during the Bush era, but the intellectual rout was so complete that they limp on as zombies, devouring the brains of politicians with remarkable ease.
This is much different from the 1930s when lots of people intuitively understood that capitalism had failed, or from the 1950s when communist economies appeared to be gaining. Under those conditions, enough of the upper class was willing to allow reforms to occur, bending and mending the system instead of letting it shatter. But since the 1980s the rich see no countervailing powers, no challenging ideas, nothing to stop them from running amok, and that's just what they've done. The political system in the US has become utterly corrupt, with the Republican party taking right-wing positions to ridiculous extremes -- unless stopped, they threaten to destroy the very idea of public interest, the basic idea of countervailing powers, even the notion that our system is based on a sense of justice. It's all very scary, the great irony being that the unfettered power of the rich is building a world much poorer not only for us but for them as well.
And what do they have to show for their concerns? Hackneyed historical analogies they don't begin to understand.
