The debate over income inequality has taken on a new twist in recent weeks: The 1% are mad as hell and they're not going to take it anymore.
Most notably, legendary venture capitalist Tom Perkins compared "the progressive war on the American one percent" to Nazi Germany in The WSJ. Real estate magnate Sam Zell agreed, telling Bloomberg TV “the 1% are being pummeled because it’s politically convenient to do so.”
Separately, Nicole Miller CEO Bud Konheim said on CNBC that Americans making $35,000 a year should stop complaining because they're much better off than people in India and China. "We've got a country that the poverty level is wealth in 99 percent of the rest of the world," he said. "So we're talking about woe is me, woe is us, woe is this."
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But the wealthiest Americans have nothing to complain about -- and are only hurting themselves with the anti-populist rhetoric, according to Steven Rattner, a former private-equity executive whose net worth was estimated to be $188 million when he became head of President Obama's auto industry taskforce in 2009.
"These people are wrong on moral grounds and wrong on policy grounds," says Rattner, who currently oversees former NYC Mayor Michael Bloomberg's investments as chairman of Willett Advisors LLC. "On a practical level, if the people in the 1% don't recognize the 99% are hurting, they're going to end up with far more severe consequences then if they were simply willing to do something now."
Those consequences could include civil unrest and "more punative legislation," such as much higher tax rates for the wealthiest, he says.
On a moral level, the whining of the 1% is particularly appalling, Rattner continues, noting overall median incomes have fallen about 7% in the past 12 years on an inflation-adjusted basis and by 25% since 1979 for the average American without a high school diploma. "This is not what America is about," he says.
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That said, Rattner calls Perkins "an extreme outlier," suggesting "there's a non-trivial group of 1%-ers who see this as not a sustainable way for a society to operate. We need to find responsible ways to fix it before it gets fixed in a non-responsible way."
Citing the need for "fundamental changes" in tax policy, education, infrastructure, investment, and training, Rattner's recommendations go beyond philanthropic efforts such as The Giving Pledge being promoted by Warren Buffett, and Bill and Melinda Gates.
"Buffett could give away all his money and it's not really going to matter to the 99% because there's a lot of them," he says."You need to have much more fundamental changes in policy."
- Society & Culture
- Steven Rattner
- income inequality