Clash of the super rich: Romney vs. ObamaArticle added by Stephen Forman on December 17, 2012
Stephen D. Forman (LTCA)

Stephen Forman

Bellevue, WA

Joined: February 07, 2011

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In the end, Obama made a choice to try to make the world a better place in the way he knew how, while Romney made a choice in his own way as well. Both men believe their moral imperatives are fully aligned with their civic duty, yet both men are individually wealthier than nearly anyone you and I will meet on the street.

On November 28th, The Washington Post’s Ezra Klein interviewed Chrystia Freeland, author of “The Plutocrats: The Rise of the New Global Super Rich and the Fall of Everyone Else.” The transcript of their interview provided telling insight into not only Mitt Romney’s loss, but also the attitudes of the oligarchy who bet on him.

For one thing, Romney’s comments regarding the 47 percent were not an aberration from which the Republican Party felt the need to distance themselves. Rather, they were an opinion shared by his largest donors: “[His comments] accurately reflected the view of a lot of these money guys. It’s the continuation of this 47 percent idea. They believe that Obama has been shoring up the entitlement society, and if you give enough entitlements to enough people, they’ll vote for you.”

By contrast, what might seem like cognitive dissonance to some was these very same donors’ inability to see Romney’s promises as “gifts” while calling out Obama for the same offense. Having spoken with many of the super rich for her book, Freeland has an answer: this class views itself very differently from you and I.

For one thing, “They’re absolutely convinced that they’re not asking for special privileges for themselves. They’re convinced that it just so happens that their self-interest coincides perfectly with the collective interest. That’s where you get this idea of the 'job creators.' The view is that to seek a low tax environment or less regulation, that’s not special pleading for yourself — it’s that this set of rules is the most conducive to economic growth for everybody. It will grow the pie.”
Two paths diverged in the woods

What may be under-reported is that many of these same super rich voted for Obama in 2008. Even then, though, he looked them straight in the eye and said he wanted to raise their taxes. Why has the relationship between the two parties deteriorated to such hostility? After all, Obama has much in common with the Ivy League set. We turn to Freeland for insight:

“I think he has a kind of Harvard Law School sense of kinship with these guys. He’s a member of the same technocratic elite. He could have taken that path. He has an admiration for those skills. But what he doesn’t have at all is a belief that the pure fact of having made a lot of money makes your views more valuable, or makes you more interesting or smarter than anyone else.”

That last sentence is a keen observation about America in general, one worth re-reading. It asks us to think philosophically about whose opinions we pay attention to, Mr. Trump. Meanwhile, Obama’s opponents feel equally comfortable in their own shoes: “If you’ve developed an ideology that what’s good for you personally also happens to be good for everyone else, that’s quite wonderful because there’s no moral tension.”

A 21st-century world

Globalization is not going away. While technology, computerization and automation might create some middle-class jobs, on par they destroy many more. Same with foreign competition. Obama’s view is that, since a strong middle class is a necessary component of a growing economy and gains aren’t being shared equally, then “redistribution” of some gains may be government’s role. Mr. Klein writes that there is a context in which the super rich would accept taxation, and a context in which they would not.

He says, "They don’t like the idea that their money should be redistributed simply because they have too much of it. They don’t like the idea that, so to speak, they didn’t build all of this, and as such, they need to give back in order to make sure it continues. And so that’s part of the tension: They don’t like why Obama is raising their taxes. And they certainly don’t like the lack of admiration he’s showing while trying to do it. They see it as punishing their success.”

Freeland is skeptical. She wonders if — after improving the education system and changing to a higher skill set, which takes investment and time — neither is enough to re-build America’s middle class?
“There’s actually the possibility that in order to have a healthy middle class, you’re going to need to have a more redistributive society, at least for awhile… Maybe this is how the world is. Maybe the 1950s were an aberration and the way the economy naturally works is this wide difference in distribution.”

She acknowledges that the dream scenario would be an economy where hard work and success led to a 1950s-style distribution of wealth, with people of “merit and inventiveness” on top, and harmony throughout society. But if we get everything right — education and economic policy — and we’re not there in 30 years, what then?

She asks, “Do you say, okay, the way it’s working now is not consistent with how we imagine this democracy should work and therefore we believe the rich should be taxed more aggressively to support the middle class? That’s a very different way of thinking about the economy and the social contract. And after Romney’s loss, the scary thing for the super rich becomes actually maybe they’re not going to be the ones to decide.”

Luck and privilege

One of the great differentiators between the United States and the tyranny we overthrew was that the British were a monarchy, decked with royal lineage and all the privilege and pomp it provided. Yet, the United States is not without its Vanderbilts, Carnegies, Schwabs, Dukes and Rockefellers. Even today we produce “captains of industry” no less formidable than Gates, Jobs, Ellison, Murdoch, Turner, Winfrey, Buffett and Stewart.

Do the super rich ever contemplate how much of their good fortune is the result of luck or privilege? Freeman believes many plutocrats share the “royal jelly” point of view (i.e., what separates drone bees from those who will be queen is the food they are served as children), crystallized by a Russian billionaire who said rather directly, “If a man is not an oligarch, something is not right with him.”

Although Freeman and I are not billionaires, one imagines that to attain such magnificent wealth, a man or woman must feel apart from everyone else. It might be by possession of a unique set of skills or brainpower, but it must certainly include very hard work and the ability to gauge risks and take the right ones. The super rich tend to believe their skills are transferable — witness Oprah attempting to conquer every media channel, or Bill Gates following up Microsoft by curing malaria. But does the mere accumulation of wealth qualify one to be president?
Here again we find a divergence between the Romney and Obama camps, or what Klein calls the “businesspeople and the do-gooders.” The tension must stretch back decades, if this description is any indication: “Much of the fight between Obama and these financiers is the fight between the Ivy League kids who turned away from the money and went into do-goodery professions like community organizing, and their roommates who went to Goldman Sachs and have always felt resentful of both the implied and explicit verdict that they sold out.”

If there’s any reconciliation between the two sides, Freeman finds it in the middle, where the “idea pursuers” thrive. She also is quick to defend the moneymakers, who put forth the following argument: “I think there is a view among many of these guys that says I am contributing more good to the world than 99.9 percent of NGO workers. I am a job creator.”

She quotes Ed Conard, from Bain Capital, “His argument is the highest and most important sphere of activity is the allocation of capital, that it’s hard to do, that the people who do it well need to be rewarded, and that that is actually what drives the improvements in society, more than a lot of this do-goody stuff. So it’s not solely a question of the business guys feeling they lose in the virtue stakes compared to their college roommates who became community organizers. I think some of them feel those people are just fooling around on the margins while they’re engaged in the real questions that save and shape the world.”

In the end, Obama made a choice to try to make the world a better place in the way he knew how, while Romney made a choice in his own way as well. Both men believe their moral imperatives are fully aligned with their civic duty, yet both men are individually wealthier than nearly anyone you and I will meet on the street.

Chrystia Freeland spent a lot of time among the super rich — do you think her characterizations are fair or accurate? Will you read her book? Do you think the American middle class has any chance of re-emergence in the next 30 years? Will it take government intervention to “redistribute” wealth in order to buttress it and ensure economic prosperity? Your comments are welcome.
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