Tom Perkins needs to find a hobby.
It seems the billionaire Silicon Valley venture capitalist hadn’t gotten it out of his system after calling attention, in what turned out to be the most-read letter-to-the-editor in Wall Street Journal history, “to the parallels of fascist Nazi Germany and its war on its ‘one percent,’ namely its Jews, to the progressive war on the American one percent, namely the “rich.”
Weird. One might think unseemly. But he wasn’t done. In the same January 24th letter, he warned of, “’progressive radicalism”, which he described as “a rising tide of hatred of the successful one percent.” Perkins continued: “This is a very dangerous drift in our American thinking. Kristallnacht was unthinkable in 1930; its descendant ‘progressive’ radicalism is unthinkable now.”
Kristallnacht, the “Night of the Broken Glass” took place in Nazi Germany in 1938. In one night across the Third Reich, Jews were rounded up; many of whom were killed. More than 7,000 Jewish-owned businesses were damaged or destroyed, along with more than 1,000 synagogues. Yeah, Tom, Occupy Wall Street is a whole lot like Kristallnacht.
Most thinking folks dismissed Perkins comments as the ranting of a publicity-seeking billionaire gone bonkers. The venerable firm he founded, Kleiner Perkins Caulfield and Byers, tweeted: “Tom Perkins has not been involved in KPCB in years. We were shocked by his views expressed today in the WSJ and do not agree.” Perkins response to the tweet? “They threw me under the bus.”
Given one of several chances to clarify his remarks, Perkins doubled-down on his attacks on the poor at an event in San Francisco on February 13th, saying that “the extreme progressivism of the tax system” is a form of persecution of the top one percent of earners in America. When asked by Fortune’s Adam Lashinsky how he’d remedy the situation, he offered this solution: “You don’t get the vote if you don’t pay a dollar in taxes. But what I really think is it should be like a corporation. You pay a million dollars, you get a million votes.”
I don’t know Tom Perkins – though I’ve read his wife Danielle Steele’s novels – so it’s easy for me to discount his views as outlandish. I do know Kevin O’Leary, of Shark Tank fame, which makes it tough for me to slough-off something he said on the daily CBC show he co-hosts with my old friend Amanda Lang. On the January 21st edition of “The Lang and O’Leary Exchange”, O’Leary and Lang were discussing a recent OXFAM report which stated that the world’s 85 richest people hold the same amount of wealth as the poorest half of the planet’s population. O’Leary said: “This is a great thing because it inspires everybody, gets them motivation to look up to the one per cent and say, ‘I want to become one of those people, I’m going to fight hard to get up to the top.’ This is fantastic news and of course I’m going to applaud it. What can be wrong with this?”
It may not be flat out #winning to be poor, but it’s actually pretty good, according to Nicole Miller co-founder and CEO Bud Konheim. Konheim told CNBC that the poor should stop complaining, because: “we’ve got a country that the poverty level is wealth in 99 percent of the rest of the world… the guy that’s making, oh my God, he’s making $35,000 a year, why don’t we try that out in India or some countries we can’t even name. China, anyplace, the guy is wealthy.”
I can’t really decide whether any of these are actually attacks on the poor. Perkins framed it as an attack BY THE POOR on the wealthy, O’Leary pointed out how lucky the poor are, and Konheim wants America’s poor to think they’re not poor because, compared to low income Indians and Chinese.
America is not India. It’s not China. America is the biggest and most prosperous nation in the world. We’re debating raising the federal minimum wage to $10.10 an hour, from the current $7.25 an hour. If you work 40 hours a week earning the federal minimum wage, you earn about $15,000 a year. The left-leaning Economic Policy Institute says raising it to $10.10 would eventually help more than 20 million Americans. Conservatives argue raising the wage will hurt small businesses and keep them from hiring workers. Both sides have valid arguments.
Leaving that debate aside, let’s look at income which, for our purposes, includes what you earn from work, and what you earn from capital gains, dividends from stocks and interest from bonds. U.S family income roughly doubled from the late 1940s to the early 1970s for almost all Americans. But, starting in the 1970s, income began growing much faster for the top five percent of earners, than for people in the middle or bottom. For the top one percent, their after-tax incomes jumped more than 200 percent between 1979 and 2010. For most Americans, wages make up the vast majority of their income, as opposed to income from investments and wages, adjusted for inflation, have declined nearly six percent for the lowest earners between 1979 and 2012. Over the same time 23-year period, wages jumped nearly 40 percent for people in the top five percent.
Let’s look at this one more way: total wealth, which includes everything someone owns, including their home, stocks and bonds. As of 2010, the top one percent of households owned 35.4 percent of all privately held wealth; the next 19 percent owned 53.5 percent. That means that just 20 percent of Americans owned a whopping 89 percent, leaving only 11 percent of the wealth for the bottom 80 percent. More starkly, the richest 400 people in the U.S. have more wealth than the poorest 150 million. It makes sense when you think about it, because wealth begets wealth. If you started 2009 with money to invest in stocks or property, and the ability to get credit at some of the lowest rates in history, this has been one of the best five year periods in history for you. If you started 2009 broke or unemployed, it may still feel like a recession to you.
Perkins, and his fellow uber-rich, need to comprehend that there is no war on the rich in America. The middle and lower classes are too busy working for their increasingly elusive piece of the “American Dream” to be waging war on anyone. Society’s top earners control wealth, wages and political power. If there is class warfare, they rich are the only ones with the disposable time and income to wage it. Historically, America’s had strong, growing and empowered middle class to work as a buffer; folks who work hard and earn money, but not enough to avoid paying most taxes. We’re losing that in America and, along with it, the dream of millions of Americans of making it into the middle class.
If the rich realized the implications of it, they’d be mad as hell, too.
Photo: Getty Images North America