Tuesday, June 01, 2010
By Porter Stansberry in the S&A Digest:
I don't think I can recall ever being more disgusted in public... and certainly not at an investment conference. [Last] Wednesday, I attended the famed Ira Sohn Investment Research Conference in New York City, which benefits pediatric cancer. The conference was good and I'm glad I went... but one presentation made me want to vomit.
It was Steve Rattner – the New York financier turned OBAMA! "car czar." Listening to him tell one lie after another about the bankruptcy of General Motors was bad enough. (And believe me... I know a little bit about GM's balance sheet, having been the first analyst anywhere to predict the carmaker's bankruptcy as early as 2005.) But having to listen to this scumbag lecture me about the evils of "income inequality" was truly more than I could bear.
This man was personally implicated in bribing New York state pension officials (but hasn't been indicted yet). He made close to $500 million via his private-equity fund (Quadrangle), while his investors underperformed municipal bonds. This guy lives in a $15 million home on Martha's Vineyard and in the same Fifth Avenue apartment building as George Soros. This is a guy who flies his own plane... whose wife is the leading fundraiser for the Democratic Party. This is Arthur Sulzberger Jr. and Michael Bloomberg's best friend. And Barry Diller's. This guy spent his entire life in the rarified world of Ivy League colleges, investment banks, and New York City's most elite social circles.
And yet... even with all of these advantages, he ended up accused of bribing New York State pension officials to get them to invest with his private-equity firm. (By the way... I have to hand it to OBAMA! on appointing Rattner as the "car czar." OBAMA! knew about the corruption charges, and he appointed Rattner to restructure General Motors anyways. After all, who better to steal from bondholders than a crook? And now, Rattner was going to lecture us, the great unwashed, about "income inequality." It was simply unbearable...
After spending about 20 minutes congratulating himself on the bailout of GM (which cost taxpayers roughly $80 billion and bondholders roughly $27 billion), Rattner put up a chart he seemed to believe indicated rich people in America were making far too much money. I let out a loud "Boooo...."
Really, it was more of a moan of agony. I just couldn't take anymore. How could such a person ever have been allowed to reach such levels of power and influence? How could an idea as obviously repelling as government-directed income redistribution ever be discussed at an investment conference filled with thousands of capitalists?
Rattner's response to my loud boo was remarkable. In his most condescending, the-government-knows-best tone he said: "I hope you're joking." As if to even question the role of government in redistributing the wealth of our society made me some kind of a mental invalid or moral outrage. I replied, in a much, much louder and more hostile tone: "YOU'RE THE JOKE."
When I write about not recognizing my fellow Americans... and feeling like I live in a country called Amerika, I'm talking about the Rattnerization of our country. This guy is the very embodiment of the term "limousine liberal." He wants to raise your taxes because his income is now all sheltered. And he thinks he knows how to use your money far better than you do. In his mind, he's doing you a big favor when he raises your taxes.
As the whole global warming thing falls apart (hard to believe it has lasted this long), guys like Rattner need a new slogan. They need a new calling – a new, better, and simpler reason to motivate voters. Their cry will be "income inequality."
The free market has failed, they say, because some people are getting very, very rich. And Rattner knows well the 50% or so of the people who no longer pay federal income taxes will believe income inequality is a problem (instead of the result of a wonderful technological revolution). And they will support every possible measure to correct "the problem." This will keep people like Rattner in power for a long, long time. Look for Al Gore's next movie to be about income inequality. You think I'm kidding. But I'm not. Rattner even has a hockey stick chart, just like Gore did, showing that income inequity is soaring... and threatening to destroy us all.
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