I don’t have the stomach to read this entire Atlantic piece about the current generation of hedge fund managers and CEOs. According to the summaries I’ve read, this group of Howard Roarks and Dagny Taggarts are a “transglobal community of peers” who would rather put money into their private foundations than pay taxes, which are wasted on lower classes.
Kevin Drum’s summary has some comedy gold, like this quote:
…Speaking at the [Aspen Ideas Festival], Thomas Wilson, CEO of Allstate, also lamented this global reality: “I can get [workers] anywhere in the world. It is a problem for America, but it is not necessarily a problem for American business … American businesses will adapt.” Wilson’s distinction helps explain why many of America’s other business elites appear so removed from the continuing travails of the U.S. workforce and economy: the global “nation” in which they increasingly live and work is doing fine — indeed, it’s thriving.
Allstate is a “global company” in the same sense that an airport with a flight to Toronto is an “international airport”. In other words, there’s Allstate and Allstate Canada. I don’t see Wilson making a move to open Allstate India or Allstate Bangladesh while he’s singing a happy tune about offshoring the jobs of the people who keep his company afloat.
But most of it is maddening:
When I asked one of Wall Street’s most successful investment-bank CEOs if he felt guilty for his firm’s role in creating the financial crisis, he told me with evident sincerity that he did not. The real culprit, he explained, was his feckless cousin, who owned three cars and a home he could not afford. One of America’s top hedge-fund managers made a near-identical case to me—though this time the offenders were his in-laws and their subprime mortgage.
When you’ve bought and paid for a Congress that won’t even raise your taxes to the rates paid during one of the biggest economic booms in history, I guess you can say shit like this without worrying about consequences, but goddam are these assholes begging for a round of Eisenhower-style taxation.
Scott
goddam are these assholes begging for a round of Eisenhower-style taxation.
More like a session with a guillotine.
4tehlulz
inb4 Soros
Earl
@Scott: Agree wholeheartedly…
agrippa
“The public be damned.”
Said Cornelius Vanderbilt.
This is not new; with the exception that Vanderbilt actually had railroads built.
Benjamin Cisco
Which is why any NeoConfederate ramblings about taking steps to “help create jobs” should be taken with a grain of salt.
__
And by “grain of salt”, I mean “salt lick”.
The Grand Panjandrum
Yeah, George Soros should close down that worthless Open Society Foundation. That Wikipedia thing is never going to go anywhere.
Michael
@Scott:
I’m thinking bullets to brainpans.
Where the fuck are the Weathermen when we need them?
TR
This is true.
You know when unemployment was at its lowest point in the post-WWII era? The summer of 1953. It was an amazingly low 2.5%.
You know when the top marginal tax rate was at its highest point in the post-WWII era? 1953. It was 92.00%.
It’s not just that these people claiming that low tax rates on the rich will lead to higher levels of employment have no data to back them up, it’s that every little bit of data we do have points in exactly the opposite direction.
And the phrase “Eisenhower-style taxation” is brilliant. For years, Republicans have been invoking the JFK tax plan to point out that Democrats have supported tax cuts in the past, but it’s worth doing the reverse and noting that during the glory days of the 1950s that John Boehner cries for today, a patriotic Republican like Eisenhower kept the top marginal tax rate in the 91-92% range for his entire presidency — and the entire economy thrived.
EIGRP
Hey, that’s not really fair to put Rochester in the same bucket as Allstate. Now, if you want to talk about the airport director and his penchant for expensive cigars on the taxpayer dime, that’s another story.
Eric
ChrisS
Why have all the local companies have outsourced their manufacturing jobs to third world countries. The GOP narrative is that taxes are too high, union employees make too much and have gold plated pension plans, and regulations are too onerous. They’re awful, how unfair.
So, the companies move them off to foreign lands where governments, desperate for economic growth, have taken out billions in loans to let US engineering companies build infrastructure. So they provide infrastructure, a cheap labor base that doesn’t bitch, and few regulations all for low low taxes. Until the country tries to figure out how to pay for all that infrastructure and provide a social safety net to their employees and clean their air, rivers and lakes, and oceans. Taxes then go up and the masters of the universe, the global citizens pack up their circus and hit the road looking for a new batch of suckers.
But god forbid someone try to tax them to pay for the services they require to conduct their free enterprise.
Annelid Gustator
Ugh. The article linked in the OP is so, so, so icky.
ChrisS
@TR:
The 1950s were also the pinnacle of American manufacturing and exports. But, you know, the common american laborer started getting uppity about what they were being paid and, with the advent of globalized shipping, a global labor force started looking really really good.
I’m not sure that an upper 90% marginal tax rate would bring back those jobs and the 1950s middle class lifestyle, BUT it sure wouldn’t hurt. Going Galt is buncha bullshit. These fuckers NEED America more than we need them.
Comrade Javamanphil
Shorter Wall Street: Those worthless ne’er-do-wells MADE us loan them money! *sob* *sob* (Dabs tears with multiple c-notes.)
EDIT: Enclosing a word in asterisks makes it bold? Who knew?
Dennis SGMM
@ChrisS:
Speaking as someone who, from the shop floor, saw machining get outsourced back in the Eighties, it wasn’t outsourced because these companies weren’t making money. The work was outsourced because they could make more money by doing so. It didn’t help that while all of this was going on our pols from from both parties were making soothing noises about re-training and high-tech jobs – both of which were a joke but, (Along with cheap credit) served to keep Americans quiet as one sector after another fled the country never to return.
Paris
I don’t think tax rates should be considered some sort of punishment. They need to be set at rates that are good for society as a whole – if that means higher rates for the higher incomes, then bonus! I don’t give envy the wealthy. Some may have some type of wisdom that they developed from experience, great, I’m all ears, but in general I don’t give a f*ck what they think about anything.
bleh
I’m with Scott.
Obama told them “I’m the only one standing between you and the pitchforks.”
He should get out of the way.
TR
@bleh:
Yeah, he should.
I’m not surprised that these entitled assholes feel this way, but I have to say I’m a little stunned that they’re expressing these feelings publicly (if anonymously).
It really is only a matter of time before one of these assholes gets shot, isn’t it?
Walker
Cactus at AngryBear recently made a detailed argument that the optimal top marginal is 65%.
jinxtigr
Spin is interesting. If you take every hagiographic reference to something like ‘megastars’, and substitute ‘thieves’, it reads TOTALLY differently :)
WereBear
So these Captains of Finance don’t really understand how it works.
Color me unsurprised.
Comrade Dread
but goddam are these assholes begging for a round of
Eisenhower-style taxation.Stalin-like purges.Fixed.
liberal
Insofar as this is an allusion to marginal tax rates (which is what some other commenters above took it to be), it doesn’t mean much without a description of what the tax base is. That is, you can have ultra-high rates, but if many types of income are effectively excluded, the resulting effective rate can be much lower.
Furthermore, what’s needed in the case of the financial sector isn’t draconian tax rates, but rather draconian regulation. That way, the exorbitant, parasitic rents these bloodsuckers are extracting from us wouldn’t be there to begin with, AND we’d markedly decrease the likelihood of another meltdown. (And no, the finreg recently enacted wasn’t even in the neighborhood of being enough.)
Rick Massimo
Don’t anyone – EVER – forget this quote.
meh
these guys could gangrape toddlers on primetime TV and nothing would happen to them. The fact that people continue to fight these clowns’ battles for them is evidence that not only does this country deserve every bad thing that happens to it, I daresay not enough bad stuff has happened. When the rules don’t apply to everyone, the rules don’t apply.
That is one the many reasons I am teaching my 2 year old both Mandarin and Spanish. In a global economy, she will need the tools to compete. These shitheads are looting the country into the ground and no one gives a fuck.
AAA Bonds
Eisenhower-level taxation?
How about rigorous federal investigation?
I mean, I get a thrill out of thoughts of purges and pitchforks and etc. too, but there are active ways the government can find out the specific crimes that these people committed – and also provide some level of deterrence. This E&Y thing is a good start, provided they spread the net much wider than that.
The police power of the state has to be brought to bear, heavily and swiftly, against the financial sector. I’m not a huge fan of that idea, either, but because of what happened, it’s a necessity, unless we want a repeat in the very near future.
Dennis SGMM
@AAA Bonds:
I’m afraid that these days a rigorous federal investigation of the financial sector would conclude that privatizing Social Security is imperative to the nation’s economic health.
Edit: The time for federal investigation and re-regulation was back in 2009 when the crash was still fresh in people’s minds.
Alwhite
I worked for Target corp for several years. My last months there focused on managing a team in India that would be taking the jobs I had been doing in Minneapolis. My question to them was “How much of Target’s gross sales come from India?” (the correct answer is a big fat fucking $0.00) Yet they are sending millions of dollars over there in wages, and even got tax benefits from the deal.
It won’t be long before American’s won’t have jobs to buy shit from Target & the income in India will be spent someplace else. Target will die and be replaced by Indian companies but they are too greedy to see this.
The master of the universe will stop being Americans. Not that it matters to us peons on the plantation but I expect them to demand the government to do something to save them. That is if the peons do not rise up and begin eating the rich before then. Either way this will not end well.
cathyx
Thom Hartmann talks about the personality disorder that CEO’s need to have in order to do their jobs effectively.
In essence he says that you have to have an unsympathetic and narcissistic personality to be able to cut jobs and only care about the bottom line and still sleep at night.
So it’s in the job description.
amk
@ChrisS: @Dennis SGMM: Yup. Both of you’re correct. And those jobs ain’t coming back because the same countries are now mastering the technologies (which used to be US’s usp) and thus have become competitors. In a way the american shareholders’ greed for more & more bottomline, never mind where that is coming is to blame.
rickstersherpa
I would recommend reading the article. Chrysta Freeland, formerly of the Financial Times and now something called “Global Editor” at Reuters (meaning that she is a paid journalist superstar salary (still well below that of NBA superstar), is really very good in that she does something rare for modern journalists. She actually provides information and does not merely repeat memes. See this interview she did a few months ago with Joseph Stiglitz.
http://blogs.reuters.com/chrystia-freeland/2010/10/07/stiglitz-says-fed-policy-is-competitive-devaluation/
It would be very ironic if these guys and gals continue to undercut Obama the next two years. They could see Palin get elected, and say what you want about Todd and Sarah, they are both practically Krakatoa’s of erupting white middle class resentment and anger. While probably dropping most of that resentment on the America’s minority population (Black and Brown), gays, hippies, and furners, I would not be surprised if, if any economic difficulty should arise during her term of office, she would throw a few of these dudes into Guantanmo (definitely, George Soros should stay out of the country in the next Republican administration). The situation we have today, after the administration of George Bush, and the Obama’s administration ratification and adoptions of those policies is that a President has the power to lock-up anybody, citizen and non-citizen, indefinitely, if they can say the person is “a terrorist or supporter of terrorism,” as defined by the President. Given how the Wikileaks episode has revealed how broad the term “terrorist” has become for the American right, that is pretty much anyone who disagrees with the talking points of the day on Fox.
I am sure that the guys in Russia make sure a steady stream of checks go to Putin and his cronies to make sure they don’t wake up in Siberia one morning.
amk
@Alwhite: Haven’t the peons been threatening to take it to the the rich for years now ? Not.Gonna.Happen. US of A will become like any other ‘developing’ nation with internal struggles & skirmishes but nothing will happen really to the moneyed class.
terraformer
It has always been about two words: cheap labor.
They forced a Civil War on the issue, and now have inculcated this mantra throughout government. The South has indeed risen again and is expanding throughout the globe in the form of corporate profit.
Bob Loblaw
@TR:
And, um, a month ago. Like dozens and dozens of Democrats in Congress. And the President.
That’s not exactly the moral high ground, with which to fight from…
PeakVT
@Walker: The problem with Cactus’s post is that it’s just a regression analysis of growth vs. top marginal rate. That’s fine as far as that goes, but it doesn’t get to the issue of 65% of how much, or all of the rates below the top.
CVS
“these assholes begging for a round of Eisenhower-style taxation.”
Not gonna happen. Those days are long, long gone.
And these companies are “American” companies in name only. Indeed, they’re only American companies when they enjoy the benefits of government support, but consider them selves “Global” when they are asked to help pay for these services.
rikyrah
it’s hard for sociopaths to feel.
PeakVT
Not that facts matter to teatards, but there isn’t much of a correlation between Kennedy’s tax cut proposal in 1963 and economic growth in the 1960s.
Sab
I doubt that will happen because the type of people that would do the shooting have been mislead into thinking that having a black Democrat in the Oval Office is real problem. At the very least, I would love to see a lot of these “titans” of business get some well-deserved parking lot therapy to set them straight.
Michael
@Paris:
Higher tax rates mean more stable investment strategies in order to preserve the value of capital. It also leads to more commitment to infrastructure maintenance and hiring.
Ultimately, it leads to an investment model that favors dividends as the metric of corporate success, as opposed to inflated book values.
celticdragonchick
Scott beat me to it, but I have to chime in.
Alwhite
@amk:
I’m convinced the real reason we have not had large-scale bloodshed is because we have always had a large, and obtainable, middle class. Since we are now destroying that its protection will be gone.
Once the teabaggers see it they are armed & likely to start their “second amendment solution”. With that genie out of the bottle it could get very hot here.
4jkb4ia
Yes, but remember the story in The Big Short about the guy who came in second place in the math competition in all of China and therefore his numbers could not be wrong. People like this are happy to work in the United States, but are not American workers until they get citizenship. They could be actuaries for Allstate and so on.
Church Lady
Can the round of Eisenhower style taxation come with a round of Eisenhower style tax shelters?
4jkb4ia
“It does not matter if one American drops out of the middle class if four people in China and India get into the middle class.” Jeebus. I may not be the most concerned about pocketbook issues on the block but I have been taught that democracy depends on a strong middle class. Economic anxieties of people who were once in the middle class can have the bad consequences we are seeing this very day. It is, in fact, time for C-SPAN.
PWL
What the article in “Atlantic” shows is that we have really gone back in time over a hundred years ago. This really IS the new Gilded Age–the only real difference is that it has gone global. The Rockefellers, et al were of the same ilk as many of the people mentioned in the article–po’ boys who “made good,” and then behaved in the same “fuck you, I’ve got mine” manner.
(And it is interesting how, then or now, these folks have no identification with, or sympathy for, the classes from which they came, but only indifference and contempt–someone ought to look into why that is so…)
So maybe it’s time to look to the past for ways to counter the New Gilded Age–with suitable modifications. I.W.W. Version 2.0, anyone?
Judas Escargot
@Alwhite:
My question to them was “How much of Target’s gross sales come from India?” (the correct answer is a big fat fucking $0.00) Yet they are sending millions of dollars over there in wages, and even got tax benefits from the deal.
I also question if they really save all that much money: Doing business halfway across the world has costs all its own (which will only go up as Peak Oil approaches), and, as you point out, they’re basically eating the seed corn by destroying their customer base. With all that cost data being proprietary, I sometimes find myself half wondering if the ‘overclass’ isn’t just shipping the jobs overseas out of spite.
That said, if it makes folks feel any better, this new pseudo-aristocracy isn’t sustainable. It needs three things to exist: cheap energy, extremely centralized/top-down social organization, and lack of transparency. The end of the fossil fuel era will take care of the first and second– hard to trot across the globe and continue to build crap in China once oil passes $200, 300 a barrel. And the onward march of technology will continue to erode the second and third (we already live in a world where a group of kids or one rogue Aussie can cause all kinds of mischief, that’s only going to get worse).
Of course, how long will that take? And how many of the ‘little people’ get to suffer in the meantime?
TooManyJens
I just got a survey from MoveOn, and one of the questions they asked was about what action we would suggest they take next. My idea was to do a nationwide literature drop — get thousands of volunteers all over the country to go door to door in their neighborhoods with literature explaining exactly how the Republican agenda is designed to enrich the banksters and the job-exporters, and how it screws the other 99% of us.
The only way we can communicate this to people is to bypass the national media. Their self-interest requires that people don’t understand the problem. Anybody have any other ideas?
TooManyJens
@Judas Escargot: I wish I had time to find the chart that was posted before the 2010 elections about how the wealthy actually do slightly better under Democratic administrations than they do under Republicans — it’s just that the rest of us do so much worse under Republicans that their comparative advantage increases.
So they might not be saving much, if any, money by outsourcing jobs when you factor in all the non-wage costs. But what they are accomplishing is keeping American workers from having good jobs and getting above their station. And that seems to be where they consider their self-interest to lie, if their voting behavior is an indication.
Will
As someone who is going through the hassle of getting a work permit for one of our European allies – our “special relationship” friend – I can tell you that a huge part of the problem is that capital and executives are global, but workers are certainly not.
So long as it is maddeningly difficult for educated professionals to legally cross borders for jobs – and next to impossible for lower-income and uneducated workers – then the “global economy” is a sham.
Chris
@Judas Escargot: But seed corn is so tasty!
The Raven
& Obama has lifted perhaps one finger to end this. Taken small and inadequate steps only. The arsonists are still in charge of the fire department. It’s not lack of support that’s the problem: Obama has given you nothing to support.
Enough about Obama. What can we do to bring the austerity program home to the very wealthy? Overflying their homes & dropping turds in their expensive wine sounds like a good start. Got any other ideas?
John - A Motley Moose
I think it’s time to face reality. The war is over and the monied class won. When a member of that class, who’s major claim to fame was bilking the government out of billions of health care dollars, can be elected governor of a major state then nothing we do can change things. Rick Scott’s company settled for $1.7 billion. The actual amount they stole from the government was probably far more. The money they stole was intended for health care. That means, without a doubt, that people were denied care because of the actions of his company, which means people almost surely died because of his fraudulent pursuit of profit. This is who the people of Florida chose for their governor.
Suck it up, people. The cause is lost. The only question left is how long it will be before they start slaughtering poor people to feed the pets of the rich.
Aardvark Cheeselog
To return to the original recommendation about Eisenhower-level top tax rates, the point of a 92% rate is not to somehow be “optimal” but to suggest that incomes above a certain level can’t possibly be earned, and to arrange that they not be paid in the first place.
It is a pure social engineering measure and has nothing to do with revenue.