Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else
Page 38
“I recently talked to an IT engineer” Matt Rosoff, “Eric Schmidt: We Don’t Talk about Occupy Wall Street in the Valley Because We Don’t Have Those Problems,” Business Insider, December 23, 2011.
“Is society’s nobility” Paul Piff, Daniel M. Stancato, Stephane Cote, Rodolfo Mendoza-Denton, and Dacher Keltner, “High social class predicts increased unethical behavior,” Proceedings of the National Academy of Sciences, 109 (2012), 4086–91.
“You know, historically” CF interview with B. N. Kalyani, November 13, 2011.
“meet somewhere in the middle” CF interview with Kris Gopalakrishnan, November 12, 2011.
“So long as our leaders tell us that we must trust them” Daniel S. Loeb, “Third Point LLC Second Quarter 2010 Investor Letter,” August 27, 2010.
“like when Hitler invaded Poland in 1939” Jonathan Alter, “A ‘Fat Cat’ Strikes Back,” Newsweek, August 15, 2010.
“Since fair is fair, tax loopholes in the financial industry” Mike Bloomberg, “How the Super Committee Can Balance the Federal Budget,” remarks prepared for Center for American Progress/American Action Forum event, November 8, 2011.
“The top 1 percent of New Yorkers pay over 40 percent” Shira Ovide, “Billionaire Tells Occupy Wall Street to Get Off His Lawn,” Deal Journal blog, Wall Street Journal, October 11, 2011.
“Acting like everyone who’s been successful is bad” Max Abelson, “Bankers Join Billionaires to Debunk ‘Imbecile’ Attack on Top 1%,” Bloomberg News, December 20, 2011.
“not a question” CF interview with Jeff Immelt, October 17, 2011.
“Capitalists are not the scourge that they are too often made out to be” Leon G. Cooperman, “An Open Letter to the President of the United States of America,” November 28, 2011.
“People don’t realize how wealthy people self-tax” CF interview with Foster Friess, February 9, 2012.
“I think [the ultrawealthy] actually” Melissa Harris “Billionaire Opens Up on Politics,” Chicago Tribune, March 11, 2012.
“We celebrate income disparity and we applaud the growing margins” Neil Hume, “God Bless Income Disparity,” Alphaville blog, Financial Times, November 17, 2011.
“wealth is fleeing the country” From a February 22, 2012, e-mail, sent out by Lindsay Rafayko of Empower Public Relations.
“We may need an escape plan” Yardeni Research Daily E-mail Briefing, December 8, 2011.
a few modern-day plutocrats are actually trying to build Jonathan Miles, “The Billionaire King of Techtopia,” Details, September 2011.
“I have yet to talk to anybody who doesn’t say” “Governance Blueprints from Global Leaders,” signature lecture panel, Centre for International Governance Innovation’s “An Unfinished House: Filling the Gaps in Global Governance” conference, Waterloo, Canada, October 28, 2011.
“For successful people to say the nasty end of the income distribution” CF interview with Mohamed El-Erian, June 15, 2010.
“No nation can tolerate for long excessive shifts in income” CF e-mail correspondence with Mohamed El-Erian, October 10, 2011.
Mark Carney is not most people’s idea of a radical See the following articles in The Globe and Mail: Andrew Willis, Tavia Grant, and Heather Scoffield, “Playing a New Game, in a New Arena,” October 5, 2007; Heather Scoffield, “Mark Carney Takes Up His Mission,” January 25, 2008; Jeremy Torobin, “Mark Carney: A Common Touch, an Uncommon Task,” January 13, 2012.
“I have called it anti-American” Rachelle Younglai and Philipp Halstrick, “JPMorgan’s Dimon’s Aggressive Style May Hurt Bank Cause,” Reuters, September 29, 2011.
Another participant remembered Dimon’s remarks Tom Braithwaite and Patrick Jenkins, “JPMorgan Chief Says Bank Rules ‘Anti-US,’” Financial Times, September 12, 2011.
JPMorgan, which earns around a quarter According to the bank’s 2011 annual report, total net revenue was $97 billion and managed revenue from outside North America was $25 billion.
After the meeting Blankfein sent Carney Tom Braithwaite, “Dimon in Attack on Canada’s Bank Chief,” Financial Times, September 26, 2011.
Dimon, who stands by the substance This account was drawn from background conversations with Wall Street bankers, as well as Kevin Carmichael, Tara Perkins, and Grant Robinson’s “Bankers, Regulators Square Off amid Turmoil,” The Globe and Mail, September 26, 2011. See also “JPMorgan’s Dimon’s Aggressive Style May Hurt Bank Cause,”
“He’s my governor and I’m very proud of that fact” Kevin Carmichael, “Carney, Waugh Spar over New Banking Rules,” The Globe and Mail, September 25, 2011.
“It is hard to see how backsliding would help” Mark Carney, “Some Current Issues in Financial Reform,” remarks to the Institute of International Finance, Washington, D.C., September 25, 2011.
between 2003 and 2011, at least fourteen Chinese Emma Dong, “China Executes 14 Billionaires in 8 Years, Culture News Reports,” Bloomberg News, July 22, 2011.
“In the 1990s, of course, free enterprise, capitalism, and so forth” Howard Fineman, “Jed S. Rakoff: Federal District Judge of New York’s Southern District (The Inspirationals),” Huffington Post, December 27, 2011.
“I placed too much confidence” David J. Lynch, “Dimon-Bernanke Faceoff Shows Frustration over Regulation amid Kohn Regrets,” Bloomberg News, July 7, 2011.
“The Fed listens to Wall Street and believes what it hears” Willem H. Buiter, “Central Banks and Financial Crises,” Federal Reserve Bank of Kansas City’s Maintaining Stability in a Changing Financial System symposium, Jackson Hole, Wyoming, August 23, 2008.
Dimon even left his own star-studded fifty-second Kate Kelly, “Inside the Fall of Bear Stearns,” Wall Street Journal, May 9, 2009.
President Obama’s favorite banker Jackie Calmes and Louise Story, “In Washington, One Bank Chief Still Holds Sway,” New York Times, July 18, 2009.
“Most of the bad actors are gone” “What Dimon Told Bernanke,” New York Times Dealbook, June 8, 2011.
“My daughter called me from school one day” Sewell Chan, “Voices That Dominate Wall Street Take a Meeker Tone on Capitol Hill,” New York Times, January 13, 2010.
the attitude they betrayed as “jaded” Mark Carney, “The Economic Consequences of the Reforms,” remarks to the Bundesbank, September 14, 2010.
more than 100 to 1 Jamie Dimon’s 2011 pay package totaled $23 million, compared to Ben Bernanke’s $199,700 salary in 2011.
CFTC officials took the Megabus Ben Protess. “U.S. Regulators Face Budget Pinch as Mandates Widen,” New York Times Dealbook, May 3, 2011.
“New and better rules” “Some Current Issues in Financial Reform”
“The argument that financial institutions” Dave Clarke, “JPMorgan’s Dimon Loses Clout as Reform Critic,” Reuters, May 11, 2012.
“CEOs have duties to their shareholders” Harris, “Billionaire Opens Up on Politics.”
“True capitalism lacks a strong lobby” Luigi Zingales, “Capitalism After the Crisis,” National Affairs 1 (Fall 2009).
“no car with my name” Lee Iacocca, Iacocca: An Autobiography (Bantam, 1984), p. 108.
“The Foundation exists and thrives” Text of Ford’s letter to Alexander Heard as published in Foundation News, March/April 1977.
“He has a right” Heather Mac Donald, “The Billions of Dollars That Made Things Worse,” City Journal, Autumn 1996.
Ford was the second-highest-paid “Who Gets The Most Pay?” and “The Dimensions of American Business: A Roster of the U.S.’s Biggest Corporations,” Forbes, May 15, 1977.
Ford’s letter crystallized a fear An example of this anxiety is the 1971 letter Lewis Powell, then a corporate lawyer and a future Supreme Court justice, wrote to Eugene Sydnor, Jr., the director of the U.S. Chamber of Commerce. In it, Powell argued, “The overriding first need is for businessmen to recognize that the ultimate issue may be survival—survival of what we call the free enterprise system, and all that this means for the strength and prosperity o
f America and the freedom of our people.”
“the academic and business communities” Irving Kristol, “On Corporate Philanthropy,” Wall Street Journal, March 21, 1977.
“programs and policies, such as social security” Mac Donald, “The Billions of Dollars That Made Things Worse.”
the five largest papers Clifford Marks, “In Media Coverage, Deficit Eclipses Unemployment,” National Journal, May 16, 2011.
“It just doesn’t make sense for people” David Burt, “Grad School Scrutinized,” Yale Daily News, September 21, 2011.
“as bank robber Willie Sutton” Drew Gilpin Faust, “Baccalaureate Address to the Class of 2008,” Cambridge, MA, June 3, 2008.
“we love Greg Mankiw” Allison Gofman, “Walking Out on Results,” Harvard Political Review, November 6, 2011.
“My first reaction was nostalgia” N. Gregory Mankiw, “Know What You’re Protesting,” New York Times, December 3, 2011.
The only four fields Professor salary figures come from the Chronicle of Higher Education’s 2011 Almanac of Higher Education, August 21, 2011.
Even as they cash their speaking fees Emily Flitter, Kristina Cooke, and Pedro da Costa, “Special Report: For Some Professors, Disclosure Is Academic,” Reuters, December 20, 2010.
Winner-Take-All Politics A big hat tip here to Jacob Hacker!
an increasing number of politicians are members Eric Lichtblau, “Economic Downturn Took a Detour at Capitol Hill,” New York Times, December 26, 2011.
One academic study has suggested that serving in Washington Alan J. Ziobrowski, James W. Boyd, Ping Cheng, and Brigitte J. Ziobrowski, “Abnormal Returns from the Common Stock Investments of Members of the U.S. House of Representatives,” Business and Politics 13:1 (2011).
But a different study by LSE and MIT researchers challenged Andrew Eggers and Jens Hainmueller, “Capitol Losses: The Mediocre Performance of Congressional Stock Portfolios, 2004–2008,” MIT Political Science Department Research Paper No. 2011-5, December 2, 2011.
Between 2000 and 2007 the Clintons earned $111 million Kenneth P. Vogel, “Tax Returns Show How Clintons Got Rich Quick,” Politico, April 4, 2008.
Tom Daschle, the former Democratic Senate majority leader David D. Kirkpatrick, “In Daschle’s Tax Woes, a Peek into Washington,” New York Times, February 1, 2009.
senators were 50 percent Larry Bartels, “Economic Inequality and Political Representation,” in The Unsustainable American State, eds. Lawrence Jacobs and Desmond Kin (Oxford University Press, 2009), pp. 167–96.
You could see the power of these networks Richard Teitelbaum, “How Paulson Gave Hedge Funds Advance Word of Fannie Mae Rescue,” Bloomberg News, November 29, 2011.
“The proportion of people with training and experience in finance” Zingales, “Capitalism After the Crisis.”
“It turns out that if I pay” CF interviews with Dan Ariely, December 2010 and January 2011.
“We are deeply social animals” “Working Wealthy Predominate the New Global Elite,” International Herald Tribune, January 25, 2011.
“‘Yes, he would give them’” Jane Austen, Sense and Sensibility (Dover, 1995), p. 3.
CONCLUSION
“We may have democracy” Mr. Justice Brandeis, Great American, ed. Irving Dilliard (Modern View Press, 1941), p. 42
“The society that puts equality” Milton Friedman, “Free to Choose,” PBS, 1980.
The story of Venice’s rise and fall Daron Acemoglu and James A. Robinson, Why Nations Fail (Crown, 2012), pp. 152–56.
“There’s a lot of anger in society because of what the government did” CF interview with Eric Schmidt, February 23, 2011.
“It’s probably true that some activities are truly creative” CF interview with Emmanuel Saez, February 24, 2011.
“A truly great business” Warren Buffett, Berkshire Hathaway Inc. 2007 Annual Report, February 29, 2008.
Great Gatsby Curve “The Rise and Consequences of Inequality in the United States.”
statistics have shown See Thomas B. Edsall, “The Reproduction of Privilege,” New York Times “Campaign Stops” blog, March 12, 2012.
worth more than $4 million See Felix Salmon, “Simmons Leaves Goldman’s Board,” Reuters, February 13, 2010.
whether the legacy system For a good exploration of this topic, see Elyse Ashburn, “At Elite Colleges, Legacy Status May Count More Than Was Previously Thought,” Chronicle of Higher Education, January 5, 2011.
“Since, by the Grace of God” Roger Crowley, City of Fortune: How Venice Ruled the Seas (Random House, 2012), p. xxviii.
BIBLIOGRAPHY
Acemoglu, Daron, and David Autor. “Skills, Tasks and Technologies: Implications for Employment and Earnings.” In Handbook of Labor Economics Volume 4. Orley Ashenfelter and David E. Card, eds. Elsevier, 2010.
Acemoglu, Daron, and James A. Robinson. Why Nations Fail: The Origins of Power, Prosperity, and Poverty. Crown Business, 2012.
Ariely, Dan. Predictably Irrational: The Hidden Forces That Shape Our Decisions. Harper, 2009.
Atkinson, Anthony, Thomas Piketty, and Emmanuel Saez. “Top Incomes in the Long Run of History.” Journal of Economic Literature 49:1 (2011). pp. 3–71.
Autor, David. “The Polarization of Job Opportunities in the U.S. Labor Market.” Center for American Progress and The Hamilton Project. April 2010.
Autor, David, and David Dorn. “The Growth of Low-Skill Service Jobs and the Polarization of the U.S. Labor Market.” MIT working paper. April 2012.
Autor, David, David Dorn, and Gordon Hanson. “The China Syndrome: Local Labor Market Effects of Import Competition in the United States.” MIT working paper. August 2011.
Bajpai, Nirupam, Jeffrey D. Sachs, and Ashutosh Varshney (eds.). India in the Era of Economic Reforms. Oxford University Press, 2000.
Bakija, Jon, Adam Cole, and Bradley T. Heim. “Jobs and Income Growth of the Top Earners and the Causes of Changing Income Inequality: Evidence from U.S. Tax Return Data.” Working paper. April 2012.
Bartels, Larry M. Unequal Democracy: The Political Economy of the New Gilded Age. Princeton University Press, 2008.
Bebchuk, Lucian A., Alma Cohen, and Holger Spamann. “The Wages of Failure: Executive Compensation at Bear Stearns and Lehman 2000–2008.” Yale Journal on Regulation 27 (2010). pp. 257–82.
Bebchuk, Lucian A., and Yaniv Grinstein. “The Growth of Executive Pay.” Oxford Review of Economic Policy 21:2 (2005). pp. 283–303.
Beckert, Sven. The Monied Metropolis: New York City and the Consolidation of the American Bourgeoisie, 1850–1896. Cambridge University Press, 2001.
Berle, Adolf A., and Gardiner C. Means. The Modern Corporation and Private Property. Transaction Publishers, 1932.
Bertrand, Marianne, “CEOs.” Annual Review of Economics 1:1 (2009). pp. 121–50.
Bertrand, Marianne, and Sendhil Mullainathan. “Are CEOs Rewarded for Luck? The Ones Without Principals Are.” Quarterly Journal of Economics 116:3 (August 2001). pp. 901–32.
Bishop, Matthew, and Michael Green. Philanthrocapitalism: How Giving Can Save the World. Bloomsbury, 2008.
Bremmer, Ian. The End of the Free Market: Who Wins the War Between States and Corporations? Portfolio, 2010.
Christensen, Clayton M. The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail. Harvard Business School Press, 1997.