A public exchange between a billionaire and a financial journalist nicely conveys the corrosive economic effects of Obama’s policies. In November 2011 hedge fund impresario Leon Cooperman wrote Obama an open letter criticizing the “divisive, polarizing tone of your rhetoric” and implying at various points that the President was guilty of “desperate demagoguery” and a “naked political pander to some of the basest human emotions.” At a time of economic stress and high unemployment, he argued, it was irresponsible to create a gulf between the “downtrodden and those best positioned to help them.”
Cooperman is a busy man, and this was not an easy letter to compose; it took courage to do so when the media was demonizing the infamous 1%. One journalist who took him to task was Reuters reporter Chrystia Freeland, who has liberal leanings but, unlike most of her peers, considerable expertise on the topic of wealthy entrepreneurs. Her book Plutocrats offers smart insights about the billionaires who are driving the global economy and reshaping social mores in the process. Unfortunately her New Yorker article, “Super-Rich Irony: Why Do Billionaires Feel Victimized by Obama?” is light on rigorous analysis but long on unflattering insinuation, which boils down to five main points:
- Plutocrats don’t have much to complain about, because Obama supported TARP and didn’t nationalize the banks. Plus, the stock market is up.
- Plutocrats should shut up because “the shifting tides of the global economy have rewarded the richest while squeezing the middle class.” This tortured circumlocution calls to mind a mysterious “tide” dumping billions of dollars in billionaires’ bank accounts, much as Hurricane Sandy dumped sand on New Jersey boardwalks. A simple transitive sentence would get closer to reality – something like “Plutocrats build successful businesses that produce useful goods and services, pay lots of taxes, and create millions of jobs.”
- Cooperman feels “entitled” and therefore shares a “sense of victimization prevalent among so many of America’s rich people” – perhaps, she implies, because he leads a glamorous life, taking phone calls from solicitous CEO’s and jetting around the country in private planes. She leaves out the crushing pressure on fund managers to put up good performance numbers or lose clients.
- Cooperman and his rich buddies don’t think of themselves as a “leisured hereditary gentry” because they built businesses by working hard. Freeland does not contest this truism but implies, implausibly, that Cooperman got lucky by making “fortunate choices.”
- Cooperman says he’s willing to pay more taxes but admits to minimizing his tax bill. It sounds greedy and unpatriotic, but Freeland forgets that the top 1% pay 37% of income tax and the bottom 50% less than 3%. Cooperman pays much, much more to Uncle Sam than he would have if he had retired to Boca Raton or become a visiting professor at a university.
Ultimately Freeland’s critique of Cooperman is about style not substance. Yes, rich Wall Streeters are offended by Obama’s juvenile attacks, but they are also coldly analytical, ceaselessly surveying the economic landscape to determine what could go right and wrong. Cooperman correctly assessed the deleterious impact of Obama’s divisive policies, which have produced a pathetic economic recovery. Unemployment and poverty would be much lower today if, instead of belittling “millionaires and billionaires,” Obama had constructively worked with Republicans in such areas as entitlement reform, tax reform, immigration, and rebuilding infrastructure. Just letting companies repatriate the capital stranded offshore would be a huge economic stimulus that would cost the Treasury nothing. But for Obama political ideology trumps sound economic policy.
Tom Agrees with Leon
One person who agrees with Cooperman is none other than New York Times pundit Tom Friedman. His Sunday column argues the U.S. economy is poised for takeoff – or would be if a “grand bargain” in Washington alleviated policy uncertainty over debt and taxes. Tom writes:
Barack Obama is president…..he owes it to himself and to the country to go make one good shot at a Grand Bargain on spending, investment and tax reform before he opts for a strategy of trying to pummel the Republicans, hope that he can win the House for the Democrats in 2014 and then push through his second-term agenda unencumbered.
Friedman correctly points out that the “austerity” debate that transfixes Keynesians is a canard, because spending restraint should focus on entitlements, which would cut future deficits without constraining current demand. He notes how absurd it is for Obama to push a rinky dink plan for a “National Network for Manufacturing Innovation,” while Apple has $137 billion stranded offshore because of our antiquated tax laws, which Obama has done nothing to fix.
Copyright 2013 Thomas Doerflinger. All Rights Reserved.
