Thursday, January 21, 2016


Bloomberg's Jeff Black reports that the folks at Davos are afraid of Donald Trump:
The prospect of Trump in the White House is ratcheting up anxiety among the 2,500 business and political leaders gathered at the Swiss ski resort for the annual World Economic Forum. With less than two weeks before voting in primaries gets under way and Trump in the Republican Party lead, those who fear a rise in protectionism and economic mismanagement are speaking out against the billionaire property developer.

... Trump’s positions -- like a “temporary” ban on Muslims entering the country and the building of a wall on the Mexican border -- are earning him opprobrium in the mountain resort.

... A Trump administration would be a “disaster,” according to Beth Brooke-Marciniak, global vice chair of public policy at Ernst & Young LLP....

The presidential race shows that the U.S. is not immune to the wave of populism sweeping the globe. In the U.S. case, the economy has recovered faster than other developed nations from the global slump of 2008 and 2009, and yet wages haven’t kept pace with a rebound in corporate profits. That’s helping candidates like Trump....
Remember when rich people suddenly started telling us that they feared they'd be the targets of angry radical mobs if nothing was done about economic inequality? Folks like real estate billionaire Jeff Greene?
“This is my fear, and it’s a real, legitimate fear,” Greene says, revving up the engine. “You have this huge, huge class of people who are impoverished. If we keep doing what we’re doing, we will build a class of poor people that will take over this country, and the country will not look like what it does today. It will be a different economy, rights, all that stuff will be different.”

... “There are all these people in this country who are just not participating in the American Dream at all,” he says. This makes him uncomfortable, not least because they might try to take a piece of his. “Right now, for some bizarre reason, a lot of these people are supporting Republicans who want to cut taxes on the wealthy,” he says. “At some point, if we keep doing this, their numbers are going to keep swelling, it won’t be an Obama or a Romney. It will be a ­Hollande. A Ch├ívez.”
Or former Young & Rubicam chairman Peter Georgescu and his pals?
I’M scared. The billionaire hedge funder Paul Tudor Jones is scared. My friend Ken Langone, a founder of the Home Depot, is scared. So are many other chief executives. Not of Al Qaeda, or the vicious Islamic State or some other evolving radical group from the Middle East, Africa or Asia. We are afraid where income inequality will lead.

For the top 20 percent of Americans, life is pretty good.

But 40 percent are broke....

If inequality is not addressed, the income gap will most likely be resolved in one of two ways: by major social unrest or through oppressive taxes, such as the 80 percent tax rate on income over $500,000 suggested by Thomas Piketty, the French economist and author of the best-selling book “Capital in the Twenty-First Century.”

We are creating a caste system from which it’s almost impossible to escape....
Or entrepreneur Nick Hanauer?
You probably don’t know me, but like you I am one of those .01%ers, a proud and unapologetic capitalist. I have founded, co-founded and funded more than 30 companies across a range of industries -- from itsy-bitsy ones like the night club I started in my 20s to giant ones like, for which I was the first nonfamily investor. Then I founded aQuantive, an Internet advertising company that was sold to Microsoft in 2007 for $6.4 billion. In cash. My friends and I own a bank.

... the rest of the country -- the 99.99 percent -- is lagging far behind.

... inequality is at historically high levels and getting worse every day. Our country is rapidly becoming less a capitalist society and more a feudal society. Unless our policies change dramatically, the middle class will disappear, and we will be back to late 18th-century France. Before the revolution.

And so I have a message for my fellow filthy rich, for all of us who live in our gated bubble worlds: Wake up, people. It won’t last.

If we don’t do something to fix the glaring inequities in this economy, the pitchforks are going to come for us. No society can sustain this kind of rising inequality. In fact, there is no example in human history where wealth accumulated like this and the pitchforks didn’t eventually come out. You show me a highly unequal society, and I will show you a police state. Or an uprising. There are no counterexamples. None. It’s not if, it’s when.
I'm sure you guys thought the mobs were coming from the direction of Zuccotti Park and headed straight for you with murder in their eyes. But the energy of that movement has dissipated, or been channeled into the Bernie Sanders campaign, where its most violent manifestation is condescending tweets aimed at Hillary supporters.

The real mob you guys feared -- the real mass movement -- is the Trump campaign. Trump fans are angry. Their anger is, as you predicted, class-based. But guess what? They're not coming to burn your Hamptons mansion to the ground. Their leader is a fellow billionaire. And if they start killing people, the victims will probably be carrying Qur'ans, or maybe Spanish-English dictionaries that got damaged in a middle-of-the-night border crossing.

Yes, revolt is brewing. But you guys -- as usual -- are going to be just fine.


Ten Bears said...

It's a common anecdote amoung those who pay attention to those sort of things that Marie Antoinette and her cohort had no idea what was coming.

Not unlike the fat merchant class bourgeoisie of Dr Zhivago, sitting around comfortably sipping good wine, praising literature and music, and pontificating on what they would do if they were running the world.

retiredeng said...

So, these fat cats should let some of that wealth "trickle down" and relieve some of the stress. The problem is that they won't or can't because wealth and even more wealth is their goal and it's an addiction with huge competition among them. Greed will not stop on its own.

Gerald Parks said...

The GOP front runners followers "think" that one day they will be the billionaire ...they will win the lottery or something.

At least they won't be Black or Brown ...

Maybe they will get chosen like the half-baked Alaskan (was that a glass slipper?).

Chai T. Ch'uan said...

Many observers trace the very genesis of the self-proclaimed "Tea Party movement" to a famous rant by CNBC reporter Rick Santelli on the trading floor of the Chicago stock market against making mom and pop mortgage victims whole. Even then, David Sirota called it out at the time as Davos denizens shamelessly co-opting the populist anger and redirecting it against their own interests. They own the media and the money, so they can tell the pitchforks which way to point.

"...the question is the same question that’s always been at the heart of economic politics: Which side are you on? And the answer, if you look at the hard data, is that most Americans are Grassroots Populists: those who think Wall Street and the government are colluding to rip off taxpayers, and who think the crumbs of aid for so-called “losers” that Santelli is ragging on is way too small — not way too much.

The gap, of course, is in the portrayal. If you watch television or read op-ed pages, the Market Populists get most of the attention. Indeed, Market Populism is portrayed as the “centrist” mainstream sentiment in the United States. . . . Meanwhile, Grassroots Populism — ie. seething populist anger at Corporate America — is depicted as the ideology only of a tiny fringe."

Feud Turgidson said...

I feel like we should be buying futures in Defarge Custom Knitwear.

Rugosa said...

So, Mr. Hanauer, what do you propose "to fix the glaring inequities in this economy"? Are you in favor of raising the minimum wage? Investing in public education? Putting people to work by rebuilding infrastructure? When I see plutocrats support real solutions to inequality, not just setting up vanity tax-break foundations for pet causes, I'll take their concerns seriously.