15 May 2015

The One Percenters' Tax Loopholes and Unindicted Frauds: Audacious Oligarchy

What set this conversation going is the 'carried interest' tax loophole that allows wealthy hedge fund manager to pay much lower taxes on what is really ordinary income.  
There are many more egregious loopholes readily available to the tax-lawyered-up wealthy, and you probably have not even heard of, or can imagine, most of them.

What interested me more about this is not so much the discussion of an obvious tax loophole, but the reactions of the participants, and the lack of self-awareness.

Ken Langone is the epitome of what is wrong with the one percent and their distorted view of reality. And Stephanie Ruhle is their cheerleader and hagiographer.  Erik Schatzker gets props for at least trying to inject some realism and balance into the discussion in the most polite way.  Well, he is a Canadian after all.

Anyone who can distill 'poor Angelo Mozilo' and 'Barney Frank did it' as the only lessons out of the carnage and suffering of the housing financial crisis with its rampant, largely unindicted fraud, brazenly committed by financial institutions and their enablers in ratings agencies, is living in an alternate universe.

And unfortunately that is the case.   The uber-wealthy often live in a bubble of delusion because few if any will ever tell them the truth, and if they do, they do not wish to hear it and shout them down or use their money and influence to shut them up.  
This is the well spring of hubris and overreach.  No one wants to tell the Emperor that he is naked.  No one can tell a Caligula that his horse is a poor choice for the Senate.  No one wants to explain to the powerful that they have gone too far, and that the times, they are a changin'.   They seem to have to get hit with reality in the face, and that is too bad for a lot of innocent bystanders.

Langone is a walking, squawking, self-delusional example of the credibility trap in action.  And he is certainly not alone.  He has a lot of brothers among the uber-wealthy, and kissing cousins in the Congress and politicians in general, and throughout the media, think tanks, and universities.

This is why there will not be any kind of meaningful internal reform until the people clip the wings of the moneyed interests from buying elections, and politicians, and the networks.

And this should be an object lesson to any people overseas who think that the terrible consequences they have suffered endured from the exports of fraudulent paper and practices of the Anglo-Americans over the past ten years have changed.

They have not.   And the utterly distorted, unrepentant, and unreformed world view of the unfortunately powerful one percent is the reason.  Why stop when you are winning...
Here is a link to the interview on Bloomberg in case the embedded version is not working for you.