Billionaire Victimology is the Worst

(By Robert Freeman)

Protesters calling for higher wages for fast-food workers stand outside a McDonald’s restaurant in Oakland, California December 5, 2013 (Photo: Reuters)The Tom Perkins “billionaires-as-victims” charade couldn’t be more surreal. It goes without saying that his comparing the 1% to victims of Hitler’s genocide is tasteless. That it is oblivious is obvious. And that Perkins himself suffers from paranoid delusions must be suspected.

But there are deeper reasons for plumbing the pathology of Perkins’ rant. As background, let’s recall some basic facts.

Over the past 30-odd years, since Reagan, a vast share of the nation’s income and wealth has been transferred from the poor, working, and middle classes to the very wealthy. Twenty five years ago, the top 1% of income earners pulled in 12% of the nation’s income, today they get twice that, 25%. And the rate of transfer is accelerating.

In the ten years between 1996 and 2006 67% of all the growth in the entire U.S. economy went to the top 1% of income earners. Between 2009 and 2012, 95% of all the new income produced in the economy went to the top 1%. What about everybody else?

Since the late 1970s, labor productivity in the U.S. has risen 259%. If the fruits of that productivity had been distributed according to the capitalist ideal that a person gets what he produces, the average person’s income would be more than double what it is today. The reality?

Median male compensation, adjusted for inflation, is lower today than it was in 1975, a full generation ago. A staggering 40% of all Americans now make less than the 1968 minimum wage. It’s the exact opposite of the cultural myth of shared prosperity and opportunity for all.
The rich are getting richer, and everyone else is getting poorer. That is not an ideological statement. It is an empirical one. Perkins believes that simply discussing such facts cannot be allowed. The rich may only be addressed in terms that signal deification.

But underlying Perkins’ tirade is a conviction that the super-rich have earned everything they’ve gotten and so are beyond reproach. Have they?

An enormous amount of the gains by the super-rich have flowed to those in the finance industry. But much of that has been the result of naked fraud and outright criminality, for example in the mortgage, mortgage securities, and derivatives markets. The simple fact of banks being “too big to fail” (an immunity to failure underwritten by the government) is worth tens of billions of dollars a year. And do we even need mention the trillions of dollars of bailouts lavished on the banks, even as millions of mortgage holders were losing their homes?

The banks have learned how to pillage the public and plunder the public purse by paying a periodic “licensing fee” in the form of a nominal fine with no admission of guilt, even as tens of millions of global victims are denuded of income and wealth.

This is hardly the John Galt/Atlas Shrugged model of rugged economic individualism that Perkins fantasizes. It is a cancerous corruption of markets, achieved by equally cancerous capture of political and regulatory systems. It is so brazen and uncontested it’s become normal. Perkins literally believes it is admirable.

Markets in fossil fuels are equally corrupted, if not more so. Coal and oil companies reap enormous, breathtaking profits, partly by offloading their waste products into the global commons called the atmosphere. As with the banks, it is a massive, trillion-dollar case of privatizing profits while socializing costs.

This is the essential nature of almost all major markets today: the government acts as guarantor of staggering private profits, underwritten at public cost. This is the basis of much of the income and wealth transfers of the past thirty years.

We have WalMart and McDonalds, for example, paying their people so little they are forced onto food stamps. It is a covert subsidy of their costs, borne by the public, and worth hundreds of billions of dollars a year. All hidden in plain view.

Or, remember G.W. Bush’s billion giveaway to the pharmaceutical industry with his Medicare Part D gift. It prohibited the government from negotiating for lower drug prices or from allowing foreign-made competition into the U.S. market. Its value? $600 billion.

The government effectively quit enforcing anti-trust thirty years ago, with the consequence that almost all major markets have become consolidated into just a handful of mega-corporations who agree not to compete on price. Think, for example, of the banking, airline, telecommunications, insurance, weapons, and media industries. They are massive oligopolies, extracting all value from their captive customers.

It is through such structuring of industries, stripping of regulations, provision of subsidies and guarantees, favorable tax treatments, and a thousand other insider artifices that the U.S. economy has become a mechanism for sluicing the nation’s income and wealth to those who are already the most wealthy, like Tom Perkins.

The consequence is that the U.S. has become the most unequal economy in the developed world, and with less upward mobility than any other industrialized country. Another consequence is the devastation of democracy, as pharaoic wealth is channeled into buying politicians, judges, regulators and all other gatekeepers of the public trust. Inequality and plutocracy then become an irreversible problem.

Perkins’ delusions of persecution might be tolerable were they rooted in some reality about the source of the 1%’s income and wealth. They are not. We must guard against letting his narcissistic delusions become anyone else’s cognitive map for how to deal with the problem.

This work is licensed under a Creative Commons Attribution-Share Alike 3.0 License.
Robert Freeman

Robert Freeman is the author of The Best One-Hour History series which includes World War I and The Vietnam War. He is the founder of the national non-profit One Dollar For Life which helps American students build schools in the developing world from their contributions of one dollar.

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7 Responses

  1. I have no time for Tom Perkins’ “The Rich as Victims” whining. Nevertheless, the constant lambasting and whining about the “one percent” as being rapacious drones who contribute nothing to society is just as ludicrous.

    Federal Government figures for calendar year 2010 reveal that the top one percent in terms of income, earned 17 percent of all income but paid 37 percent of all federal income tax collected. The top ten percent in terms of income, earned 43 percent of all income but paid 71 percent of federal income tax collected. The bottom 50 percent paid practically no federal income tax at all–just two percent.

    Whether or not the top one percent and ten percent in the U.S. in terms of income should pay more in federal income taxes is debatable. It is pretty clear, however, that they pay the vast lion’s share of federal income taxes collected.

    • You could have just stopped after saying that 1.1 million people took home about a fifth of our national income. They aren’t taxed nearly highly enough.

    • I think it’s a bit of an exaggeration Bill to assert most people who are angry about the inequality in this country are referring to the “one percent” as being rapacious drones who contribute nothing to society.” That’s more the language you would here come out of right wing blogs and so-called think tanks like the Heartless, er Heartland Institute.

      These government figures really don’t show the entire picture either where very wealthy people take advantage of tax loop holes and subsidies that lower income people don’t. The fact that any record shows them paying “37 percent of all federal income tax collected” while the lower 50% of income earners pay about 2% ignores how this data supports the claims about increased income inequality in this country. As more people’s income shrinks and drops them below poverty levels, they actually have less income to pay taxes on. Conversely, the more the higher income earners make the more it reflects on their percentage of the tax revenue. Or did this subtle point elude you?

      This isn’t an argument about disparaging all wealthy people in America. We all want to achieve a comfortable level of wealth. It’s about the way the game has been fixed that makes it tougher for many of us to achieve and THAT is why you are seeing a shrinking middle class that even business owners can clearly see.

      The Middle Class Is Steadily Eroding. Just Ask the Business World.

      And then there are these other issues about inequality that hurt us all as PAUL BUCHHEIT discusses in this piece

      1. The 30 Richest Americans Own as Much as Half of the U.S. Population

      2. The Bottom Half of America Owns a Smaller Percentage of National Wealth Than Almost All Other Countries and Continents
      3. Less Mobility: North America’s Bottom Half Has Less Chance to MOVE UP Than Any Other Region of the World

      4. America’s MIDDLE CLASS Is Further From the Top Than in All Other Developed Countries

  2. And then there’s buttheads like economist and commodity analyst Dennis Gartman who feels that the growing income disparity in this country is a good thing

    “We celebrate income disparity” Gartman says, “and we applaud the growing margins between the bottom 20% of American society and the upper 20% for it is evidence of what has made America a great country. … Do we feel bad for the growing gap between the rich and the poor in the US? Of course not; we celebrate it, for we were poor once and we are reasonably wealthy now. We did it on our own, by the sheet(sic) dint of will, tenacity, street smarts and the like.” SOURCE

    People like Gartman perpetuate this Horatio Alger myth by pretending that everyone can be a successful entrepreneur if they just apply a little “dint of will, tenacity, street smarts and the like.” Modern capitalism has built an economic system that requires workers and lots of them after we transitioned from an agrarian to an urban society. Sadly though these workers are expected to do what a consumer economy needs on wages that barely provide enough to stay out of the poor house. Even sadder is that as industrial use of robotics expands fewer workers will be required for the skilled jobs that once made up the middle class.

  3. Well, I guess one could characterize Tom Perkins’ rant as “tasteless” and “narcissistic.” But being a sucker for cheap entertainment, I got a real change out of his routine of the billionaire as victim.
    Perhaps, he should form his own recovery group, BA, Billionaires Anonymous.
    Step One: We admitted we were powerless over all the poor workers in America wanting a fair share in the profits of our economy.
    Of course, I’m being facetious about him. But it’s rather odd yet interesting that despite all his wealth, fame and power he was acting just a regular tea bagger without ant money.

  4. There is a single formula that unites every wealthy person/family: Have lots and lots of people work for you for less remuneration than they contribute to the company in revenue.

    There is no way to get rich, much less wealthy, without having other people working for you. Even the “millionaire next door” plumber, or construction contractor needs accountants, tax advisors, investment advisors, and people to do at least some of the grunt work to become a millionaire.

  5. Much of the problem occurrs at the topmost layer of the “one percent”. How much of “the one percent’s ” income goes to the opoop (one percent of one percent)? How much of it goes to an even smaller fraction of people called the opoopoop (one percent of one percent of one percent)?

    Also, what percent of the nations medicare taxes does the one percent pay? What percent of the nation’s SS FICA taxes does the one percent pay?

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