It seems America’s bankers are tired of all the abuse. They’ve decided to speak out.
"The very rich on today’s Wall Street," writes Taibbi, "Are now so rich
that they buy their own social infrastructure. They hire private
security, they live on gated mansions on islands and other tax havens,
and most notably, they buy their own justice and their own government."
True, they’re doing it from behind
the ropeline, in front of friendly crowds at industry conferences and
country clubs, meaning they don’t have to look the rest of America in
the eye when they call us all imbeciles and complain that they shouldn’t
have to apologize for being so successful.
But while they haven’t yet deigned to talk to protesting America face
to face, they are willing to scribble out some complaints on notes and
send them downstairs on silver trays.
Courtesy of a
remarkable story by Max Abelson at Bloomberg, we now get to hear some of those choice comments.
Home Depot co-founder
Bernard Marcus, for instance, is not worried about
OWS:
“Who gives a crap about some imbecile?” Marcus said. “Are you kidding me?”
Former New York gurbernatorial candidate
Tom Golisano, the
billionaire owner of the billing firm
Paychex, offered his wisdom while
his half-his-age tennis champion girlfriend hung on his arm:
“If I hear a politician use the term ‘paying your fair share’ one
more time, I’m going to vomit,” said Golisano, who turned 70 last month,
celebrating the birthday with girlfriend Monica Seles, the former
tennis star who won nine Grand Slam singles titles.
Then there’s
Leon Cooperman, the former chief of
Goldman Sachs’s
money-management unit, who said he was urged to speak out by his fellow
golfers. His message was a version of Wall Street’s increasingly popular
If-you-people-want-a-job, then-you’ll-shut-the-fuck-up rhetorical line:
Cooperman, 68, said in an interview that he can’t walk through the
dining room of St. Andrews Country Club in Boca Raton, Florida, without
being thanked for speaking up. At least four people expressed their
gratitude on Dec. 5 while he was eating an egg-white omelet, he said.
“You’ll get more out of me,” the billionaire said, “if you treat me with respect.”
Finally, there is this from
Blackstone CEO
Steven Schwartzman:
Asked if he were willing to pay more taxes in a Nov. 30 interview
with Bloomberg Television, Blackstone Group LP CEO Stephen Schwarzman
spoke about lower-income U.S. families who pay no income tax.
“You have to have skin in the game,” said Schwarzman, 64. “I’m not
saying how much people should do. But we should all be part of the
system.”
There are obviously a great many things that one could say about this
remarkable collection of quotes. One could even, if one wanted, simply
savor them alone, without commentary, like lumps of fresh caviar, or raw
oysters.
But out of Abelson’s collection of doleful woe-is-us complaints from
the offended rich, the one that deserves the most attention is
Schwarzman’s line about lower-income folks lacking “skin in the game.”
This incredible statement gets right to the heart of why these people
suck.
Why? It's not because Schwarzman is factually wrong about
lower-income people having no “skin in the game,” ignoring the fact that
everyone pays sales taxes, and most everyone pays payroll taxes, and of
course there are property taxes for even the lowliest subprime mortgage
holders, and so on.
It’s not even because Schwarzman probably himself pays close to zero
in income tax – as a private equity chief, he doesn’t pay income tax but
tax on carried interest, which carries a maximum 15% tax rate, half the
rate of a New York City firefighter.
The real issue has to do with the context of Schwarzman’s quote. The
Blackstone billionaire, remember, is one of the more uniquely abhorrent,
self-congratulating jerks in the entire world – a man who famously
symbolized the excesses of the crisis era when, just as the rest of
America was heading into a recession, he
threw himself a $5 million birthday party,
featuring private performances by Rod Stewart and Patti Labelle, to
celebrate an IPO that made him $677 million in a matter of days (within a
year, incidentally,
the investors who bought that stock would lose three-fourths of their investments).
So that IPO birthday boy is now standing up and insisting, with a
straight face, that America’s problem is that compared to taxpaying
billionaires like himself, poor people are not invested enough
in
our society’s future. Apparently, we’d all be in much better shape if
the poor were as motivated as Steven Schwarzman is to make America a
better place.
But it seems to me that if you’re broke enough that you’re not paying any income tax, you’ve got nothing but
skin in the game. You've got it all riding on how well America works.
You can’t afford private security: you need to depend on the police.
You can’t afford private health care: Medicare is all you have. You get
arrested, you’re not hiring Davis, Polk to get you out of jail: you rely
on a public defender to negotiate a court system you'd better pray
deals with everyone from the same deck. And you can’t hire landscapers
to manicure your lawn and trim your trees: you need the garbage man to
come on time and you need the city to patch the potholes in your street.
And in the bigger picture, of course, you need the state and the
private sector both to be functioning well enough to provide you with
regular work, and a safe place to raise your children, and clean water
and clean air.
The entire ethos of modern Wall Street, on the other hand, is
complete indifference to all of these matters.
The very rich on today’s
Wall Street are now so rich that they buy their own social
infrastructure. They hire private security, they live on gated mansions
on islands and other tax havens, and most notably, they buy their own
justice and their own government.
An ordinary person who has a problem that needs fixing puts a letter
in the mail to his congressman and sends it to stand in a line in some
DC mailroom with thousands of others, waiting for a response.
But citizens of the stateless archipelago where people like
Schwarzman live spend millions a year lobbying and donating to political
campaigns so that they can jump the line. They don’t need to make sure
the government is fulfilling its customer-service obligations, because
they buy special access to the government, and get the special service
and the metaphorical comped bottle of VIP-room Cristal afforded to
select customers.
Want to lower the capital reserve requirements for investment banks?
Then-
Goldman CEO Hank Paulson takes a meeting with
SEC chief Bill
Donaldson, and gets it done. Want to kill an attempt to erase the
carried interest tax break? Guys like Schwarzman, and
Apollo’s Leon
Black, and
Carlyle’s David Rubenstein, they just
show up in Washington at Max Baucus’s doorstep, and they get it killed.
Some of these people take that VIP-room idea a step further.
J.P. Morgan Chase CEO Jamie Dimon – the man the
New York Times once
called “Obama’s favorite banker” – had an excellent method of
guaranteeing that the Federal Reserve system’s doors would always be
open to him. What he did was, he served as the
Chairman of the Board of the New York Fed.
And in 2008, in that moonlighting capacity, he orchestrated a deal in which the Fed provided
$29 billion in assistance to help his own bank, Chase, buy up the teetering investment firm Bear Stearns. You read that right: Jamie Dimon helped give himself a bailout
. Who needs to worry about good government, when you
are the government?
Dimon, incidentally, is another one of those bankers who’s
complaining now about the unfair criticism. “Acting like everyone who’s
been successful is bad and because you’re rich you’re bad, I don’t
understand it,” he recently said, at an investor’s conference.
Hmm. Is Dimon right? Do people hate him just because he’s rich and
successful? That really would be unfair. Maybe we should ask the people
of Jefferson County, Alabama, what they think.
That particular locality is now
in bankruptcy proceedings primarily because Dimon’s bank, Chase, used middlemen to bribe local officials – literally bribe, with cash and watches and
new suits – to sign on to a series of onerous interest-rate swap deals that vastly expanded the county’s debt burden.
Essentially, Jamie Dimon handed Birmingham, Alabama a Chase credit
card and then bribed its local officials to run up a gigantic balance,
leaving future residents and those residents’ children with the bill. As
a result, the citizens of Jefferson County will now be making payments
to Chase until the end of time.
Do you think Jamie Dimon would have done that deal if he lived in
Jefferson County? Put it this way: if he was trying to support two kids
on $30,000 a year, and lived in a Birmingham neighborhood full of people
in the same boat, would he sign off on a deal that jacked up everyone’s
sewer bills 400% for the next thirty years?
Doubtful. But then again, people like Jamie Dimon aren’t really
citizens of any country. They live in their own gated archipelago, and
the rest of the world is a dumping ground.
Just look at how Chase behaved in Greece, for example.
Having seen how well interest-rate swaps worked for Jefferson County,
Alabama, Chase “helped” Greece mask its debt problem for years by
selling a similar series of swaps to the Greek government. The bank then
turned around and worked with banks like Goldman, Sachs to create a
thing called the
iTraxx SovX Western Europe index, which allowed investors to bet against Greek debt.
In other words, Chase knowingly larded up the nation of Greece with a
crippling future debt burden, then turned around and helped the world
bet against Greek debt.
Does a citizen of Greece do that deal? Forget that: does a human being do that deal?
Operations like the Greek swap/short index maneuver were easy money
for banks like Goldman and Chase – hell, it’s a no-lose play, like
cutting a car’s brake lines and then betting on the driver to crash –
but they helped create the monstrous European debt problem that this
very minute is threatening to send the entire world economy into
collapse, which would result in who knows what horrors. At minimum,
millions might lose their jobs and benefits and homes. Millions more
will be ruined financially.
But why should Chase and Goldman care what happens to those people? Do they have any skin in that game?
Of course not. We’re talking about banks that not only didn’t warn
the citizens of Greece about their future debt disaster, they actively
traded on that information, to make money for themselves.
People like Dimon, and Schwarzman, and John Paulson, and all of the
rest of them who think the “imbeciles” on the streets are simply full of
reasonless class anger, they don’t get it. Nobody hates them for being
successful. And not that this needs repeating, but nobody even minds
that they are rich.
What makes people furious is that they have stopped being citizens.
Most of us
99-percenters couldn’t even let our dogs leave a dump on
the sidewalk without feeling ashamed before our neighbors. It's called
having a conscience: even though there are plenty of things most of us
could get away with doing, we just don’t do them, because, well, we live
here. Most of us wouldn’t take a million dollars to swindle the local
school system, or put our next door neighbors out on the street with a
robosigned foreclosure, or steal the life’s savings of some old
pensioner down the block by selling him a bunch of worthless securities.
But our
Too-Big-To-Fail banks unhesitatingly take billions in bailout
money and then turn right around and finance the export of jobs to new
locations in China and India. They defraud the pension funds of state
workers into buying billions of their crap mortgage assets. They take
zero-interest loans from the state and then lend that same money back to
us at interest. Or, like Chase, they bribe the politicians serving
countries and states and cities and even school boards to take on
crippling debt deals.
Nobody with real skin in the game, who had any kind of stake in our
collective future, would do any of those things. Or, if a person did do
those things, you’d at least expect him to have enough shame not to
whine to a
Bloomberg reporter when the rest of us complained about it.
But these people don’t have shame. What they have, in the place where
most of us have shame, are extra sets of balls. Just listen to
Cooperman, the former Goldman exec from that country club in Boca.
According to Cooperman, the rich do contribute to society:
Capitalists “are not the scourge that they are too often made out to
be” and the wealthy aren’t “a monolithic, selfish and unfeeling lot,”
Cooperman wrote. They make products that “fill store shelves at
Christmas…”
Unbelievable. Merry Christmas, bankers. And good luck getting that message out.
