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http://www.nytimes.com/2014/01/27/opinion/krugman-paranoia-of-the-plutocrats.html?_r=0
Rising inequality has obvious economic costs: stagnant wages
despite rising productivity, rising debt that makes us more vulnerable
to financial crisis. It also has big social and human costs. There is,
for example, strong evidence that high inequality leads to worse health and higher mortality.
But
there’s more. Extreme inequality, it turns out, creates a class of
people who are alarmingly detached from reality — and simultaneously
gives these people great power.
The
example many are buzzing about right now is the billionaire investor
Tom Perkins, a founding member of the venture capital firm Kleiner
Perkins Caufield & Byers. In a letter to the editor
of The Wall Street Journal, Mr. Perkins lamented public criticism of
the “one percent” — and compared such criticism to Nazi attacks on the
Jews, suggesting that we are on the road to another Kristallnacht.
You
may say that this is just one crazy guy and wonder why The Journal
would publish such a thing. But Mr. Perkins isn’t that much of an
outlier. He isn’t even the first finance titan to compare advocates of
progressive taxation to Nazis. Back in 2010 Stephen Schwarzman, the
chairman and chief executive of the Blackstone Group, declared
that proposals to eliminate tax loopholes for hedge fund and
private-equity managers were “like when Hitler invaded Poland in 1939.”
And
there are a number of other plutocrats who manage to keep Hitler out of
their remarks but who nonetheless hold, and loudly express, political
and economic views that combine paranoia and megalomania in equal
measure.
I
know that sounds strong. But look at all the speeches and opinion
pieces by Wall Streeters accusing President Obama — who has never done
anything more than say the obvious, that some bankers behaved badly — of
demonizing and persecuting
the rich. And look at how many of those making these accusations also
made the ludicrously self-centered claim that their hurt feelings (as
opposed to things like household debt and premature fiscal austerity)
were the main thing holding the economy back.
Now,
just to be clear, the very rich, and those on Wall Street in
particular, are in fact doing worse under Mr. Obama than they would have
if Mitt Romney had won in 2012. Between the partial rollback of the
Bush tax cuts and the tax hike that partly pays for health reform, tax
rates on the 1 percent have gone more or less back to pre-Reagan levels. Also, financial reformers have won some surprising victories over the past year, and this is bad news for wheeler-dealers
whose wealth comes largely from exploiting weak regulation. So you can
make the case that the 1 percent have lost some important policy
battles.
But
every group finds itself facing criticism, and ends up on the losing
side of policy disputes, somewhere along the way; that’s democracy. The
question is what happens next. Normal people take it in stride; even if
they’re angry and bitter over political setbacks, they don’t cry
persecution, compare their critics to Nazis and insist that the world
revolves around their hurt feelings. But the rich are different from you
and me.
And
yes, that’s partly because they have more money, and the power that
goes with it. They can and all too often do surround themselves with
courtiers who tell them what they want to hear and never, ever, tell
them they’re being foolish. They’re accustomed to being treated with
deference, not just by the people they hire but by politicians who want
their campaign contributions. And so they are shocked to discover that
money can’t buy everything, can’t insulate them from all adversity.
I
also suspect that today’s Masters of the Universe are insecure about
the nature of their success. We’re not talking captains of industry
here, men who make stuff. We are, instead, talking about
wheeler-dealers, men who push money around and get rich by skimming some
off the top as it sloshes by. They may boast that they are job
creators, the people who make the economy work, but are they really
adding value? Many of us doubt it — and so, I suspect, do some of the
wealthy themselves, a form of self-doubt that causes them to lash out
even more furiously at their critics.
Anyway,
we’ve been here before. It’s impossible to read screeds like those of
Mr. Perkins or Mr. Schwarzman without thinking of F.D.R.’s famous 1936
Madison Square Garden speech, in which he spoke of the hatred he faced from the forces of “organized money,” and declared, “I welcome their hatred.”
President
Obama has not, unfortunately, done nearly as much as F.D.R. to earn the
hatred of the undeserving rich. But he has done more than many
progressives give him credit for — and like F.D.R., both he and
progressives in general should welcome that hatred, because it’s a sign
that they’re doing something right.
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