Can a man who once owned the world's largest sailing yacht claim to be a victim of discrimination? Well, when it comes to Tom Perkins, the answer is yes; although he presented his argument in such a ham-fisted manner, it made Richard Sherman seem like Mister Spock. But, the gist of the Silicon Valley tycoon's concerns shouldn't be ignored or dismissed.
In fact, these days anyone pointing out societal trends and movements that threaten established orthodoxy, such as Christianity, or dismantling of capitalism, better not leave room for deliberate misinterpretation; even when you are careful to make finer points, snippets of your speeches, or writings can be used to portray you as something you may, or may not be, completely ignoring your central message. This is happening with me now, and with more frequency. Yes, Tom Perkins comparing the war on success, with the one percent to atrocities committed on the Jews in Nazi Germany, was too much.
But his notion that there is a war on people that are successful and create jobs is correct, and that this war promises to become psychically violent as the masses are goaded on by the media, celebrities, and politicians. Perkins comments that "Kristallnacht was unthinkable in 1930." This is true, not because mankind hadn't committed such atrocities in the past, but because there was a sense at the time that mankind had reached a certain level of civilization. Since the end of World War II, similar scenes have played throughout time across continents, and it is clear that mankind will never be so civilized; it cannot resort to pure evil and savagery.
A (dangerous) fine line is being walked in America and in other parts of the West, with the demonization of the most successful citizens.
We must begin a discussion or debate about the one percent, the overwhelming majority who began life as part of the 99 percent, and many at the bottom rungs of that category. Those who took chances, made sacrifices, and worked hard (I'm not talking about working overtime a couple nights a week), but got lucky, and were tough. In fact, believe in a tough love these days and that is equated with being mean or unfair, even if it is part of the magic formula that changes lives, more than any government handout could ever hope to achieve. (Although, the fact is such programs seek to make poverty comfortable, and not to propel recipients into wealth or even self-sufficiency.)
Media Pounced
Seizing on Perkins' invoking Nazis and Jews into the conversation, the media had a field day attacking the man that had the audacity to say that he and others in his income bracket were being singled out and attacked.
Talking Points Memo:
Said the one percent has a "persecution complex" and recent events like the banking crashes has knocked them off third pedestal and left them with a kind of post-traumatic stress syndrome akin to "socioeconomic acrophobia."
Bloomberg Business Week:
Sported a headline that read "Rising Tide of Hatred of the Successful One Percent" that ridiculed the very notion rich people could be treated like any other minority, claiming their wealth protected them from government.
Once again, I have to wonder if any of these people ever read any history books, because no amount of wealth can stop a stampeding public hell-bent on retribution. I'm not talking about that petty move pulled by New York City mayor Bill de Blasio, who decided neighborhoods that pay the least amount in taxes, should have the best plowed streets. I'm talking about rules that aim to separate the rich from their wealth and when that fails, violence. While Business Week mocked the "paranoid rage" of the one percent, real rage is being manufactured and excused.
I met Tom Perkins six- years ago, right after he took possession of the Maltese Falcon, then the largest sailing yacht ever built. He was relaxed, confident, and came across intermittingly as a no-nonsense guy, who couldn't escape his I'm-richer-than- you aura that dripped off his expensive polo shirt onto his handmade loafers. Still we talked in general, and I came away thinking he was okay for a guy with a 288-foot completely automated yacht. I didn't hate him, and he wasn't paranoid. But that was then, and this is now.
I admire self-made people, from the guys who scraped together enough cash to operate a successful hot dog cart in New York; (one of the first entrepreneurs I knew in Harlem bought one, and to me he was Bill Gates; and then there was the guy from Italy who put his three kids through college via his hot dog cart). Or, the woman that bought the "Maltese Falcon" from Perkins, after talking him down from $150 million to $120 million: I'm fortunate that I've met so many people that are technically in the top one percent , or top five percent, but that will never own a yacht.
There is a war on success. It hasn't been violent, but that doesn't mean that it can't, or that it won't one day. Tonight, President Obama will talk about a nation where rich people take away opportunity from poor people, and note that government is the only solution. But the welfare state is expensive, and the only way to keep growing it is to pass on the cost to corporate America. The kind of anger needed to get this done legislatively could spill over into something more ominous. Moreover, threat of executive orders, pushing through laws, without Congress also has a violent undertone.
This goes against the Constitution, the ultimate document of law and order, and peace that creates the only backdrop where anyone and everyone can succeed.
We can snicker at Tom Perkins and his poor analogy, or we can look around and understand that his fears may one day spread to many others because the kind of anger based on envy can become uncontrollable. It can ravish an individual or a country once its spreads. Coupled with failed economic policy it can destroy. I don't think we should wait for people to be dragged out of their Park Avenue homes before we see how dangerous this war really is and can become.
By the way, despite his op-ed and follow up interviews defending his comments, even Tom Perkins retreated from the idea he is "super rich" telling Bloomberg radio he's not a billionaire, just a millionaire. I've read in many reputable publications that Mr. Perkins is a billionaire, in fact worth as much as $8.0 billion, something he was surely proud of when I met him in the green room a few years ago. Tom Perkins apologized for his use of the word "Kristallnacht" but said he was sticking to his guns on the central theme of his warning.
If you prick us, do we not bleed? If you tickle us, do we not laugh? If you poison us, do we not die? And if you wrong us, shall we not revenge? - Shylock
Merchant of Venice, William Shakespeare
We need to understand that rich people, while having amazing advantages, are in the end people that mostly mean well and have overcome much.
Note: In 2012 there were 75.3 million workers in the United States age 16 and over working at hourly rates according to the Bureau of Labor.
> 1.6 million or 2.1% of total earned at the federal minimum wage of $7.25
> 2.0 million or 2.7% of total earned below the federal minimum wage of $7.25
Essentially this "debate" covers less than 5% of workers, but will be pitched as an affront to everyone and somehow a cure to our economic ails.
Today's Session
Lots of earnings out this morning and most beat the Street with guidance generally higher. The biggest name in the bunch, however, laid a guidance egg. Apple posted what is arguably the best quarter in the history of technology. But guidance has spooked the street sending shares down big time.
On the other hand, The Fed meets for the last time in the Bernanke era and I'm sure he wishes the last gathering was the last. Economic data continues to struggle with durable goods coming in ugly this morning.
Headline -4.3 versus consensus 1.8 (November revised -2.6 from 3.5)
Shipments non-defense ex-aircraft -1.3 versus consensus 0.3 (November revised 2.3 from 2.8)
Key support points held yesterday, but I didn't like that close and even though equities futures are higher they've drifted all morning long. We have to watch this from afar this morning: those support points have to continue to hold.