'Then they fight you' -- why the 1 Percent is in full panic mode
Ken Langone and other billionaires are lashing out because they are losing the class war.
'Then they fight you' -- why the 1 Percent is in full panic mode
It was nearly a century ago that a trade union leader said this: "And, my friends, in this story you have a history of this entire movement. First they ignore you. Then they ridicule you. And then they attack you and want to burn you. And then they build monuments to you." The quote is often misattributed to Gandhi, and it's usually paraphrased: "First they ignore you, then they ridicule you, then they fight you, then you win." But the reason it's remembered at all is because it's a pretty darned good summary of progressive social movements in modern times.
I wasn't around in 1918, but I watched in 2011 when the cauldron of income inequality and the beat-down of the American working class started to boil over in places like New York's Zuccotti Park, and I wrote one of the first pieces about how it was being ignored. Then I went to report on Occupy Wall Street in person and heard some of the harsh ridicule shouted by the Jordan Belfort-wannabes of the world.
In the last few months, though, we've seen something truly amazing happen. The 1 Percent is in "they fight you" mode, in some of the crudest terms possible. They are attacking the movement for equity in this country, and -- at least rhetorically, for now -- they want to burn it.
You should draw your own conclusions as to what comes next.
Just this week, we saw the latest fighting words from the billionaire class -- and the second time that folks staging legal, peaceful and democratic protests for things like a higher minimum wage, and protecting the safety net for those still reeling from an economic crisis triggered in 2008 by the billionaire class, have been compared to Nazis. This time it was Ken Langone, the investor who helped launch Home Depot and now invests his spare millions in politicians like Chris Christie and Andrew Cuomo. His comment has been bouncing around the Web for 36 hours, long enough for the predictable Mad Libs fauxpology ("If anybody was offended..blah, blah, blah") but let's look at it one more time.
“I hope it’s not working,” Ken Langone...said of populist political appeals. “Because if you go back to 1933, with different words, this is what Hitler was saying in Germany. You don’t survive as a society if you encourage and thrive on envy or jealousy.”
This comes just a few weeks after Langone's fellow billionaire (who knew there were so many of these guys?), Tom Perkins of San Francisco, said the growing populist movement reminded him of Kristallnacht, the especially odious attack on Jews that was carried out by the Nazis in 1938. But it's Langone who's been on a tear recently. A Catholic and a longtime financial booster of his church when conservatives were in charge in the Popes John Paul II and Benedict era, the New York moneyman seems spooked by the arrival of populist anti-poverty crusading Pope Francis. He said earlier this year that successful Catholics might stop writing large checks if Francis' attacks on the “culture of prosperity” continue.
There are many things that one could say in response to that. First of all, the Nazi comparison isn't just highly offensive but it's more than a tad silly, since as evil totalitarian movements go, Adolf Hitler and the Nazis were about as pro-capitalism and pro large-corporations as they come. That's one more "tell" that the comments by people like Langone and Perkins are more born out of panic than of any kind of attempt to start a serious conversation about wealth and inequality.
And Ken Langone should know that better than most people. He was born in 1935, in that critical time when the world was deciding between dictatorship and democracy. And it was the American way of life that won out in the mid-20th Century -- largely because the progressivism of FDR's New Deal make it possible for people like the young Ken Langone, the son of a plumber and a school cafeteria worker, to survive the Great Depression and then win World War II. The better working conditions and safety net of that era created the world in which a child of the working class like Langone could go on to college and then to Wall Street.
As ugly as Langone's recent comments were, the worst reply would be an in-kind response. No, I'm going to say a couple of nice things about him. Clearly the guy worked hard as a young man (he literally dug ditches) and since striking it rich he's given a lot back through worthwhile philanthropy. But today, on their insular planet of immense wealth, Langone, Perkins and other billionaires have lost all sense of how the opportunistic America that he grew up in has vanished.
Langone should know that better than most, because he did more than anyone to help make it go away. In 1980, a couple of years after Langone worked his Wall Street voodoo to create Home Depot, the average American CEO made 42 times as much in salary as his average employee, more than enough to live a comfortably lavish lifestyle. That year coincidentally marked the election of Ronald Reagan, who not only kicked off the upward flood of money by slashing marginal income tax rates for the rich and raising payroll taxes on the working class, but signaled the end of collective bargaining by crushing the air-traffic controllers union. But it was Langone who worked hardest to execute what Reagan had started.
The New York Times (via Nexis) wrote in 2004 that...
...Langone has a long history of handing out lucrative pay packages. ''Ken Langone is the fox that lets the chicken out of the compensation henhouse,'' said Sarah Teslik, executive director of the Council of Institutional Investors, an investor advocacy group. ''It is O.K. to pay for performance but the amount still matters..."
What triggered that article was a then scandal over Langone's role in arranging for his good friend Richard Grasso to receive a whopping $31 million yearly salary running the New York Stock Exchange, a dispute that was a big deal at the time but seems quaint a decade later. Langone also pushed through massive compensation packages for then-Home Depot chief Robert Nardelli and, as a compensation board member at General Electric, for GE's Jack Welch, an icon of the era of the obscenely paid celebrity CEO. By 2012, when Langone's ideals had become the industry norm, the average CEO made 380 times his typical worker, even (or especially) in a stagnant economy where many of the available positions are low-wage service gigs in fast food or retail paying less than $10 an hour.
This is class warfare, but there is no question which class fired the first shots -- and the distress that you now hear in the voices of Langone or Perkins is only because the invaded party is finally fighting back. This is a prospect that has terrified the 1 Percent for some time. In 2008, one of Langone's co-founders of Home Depot, it's former CEO Bernie Marcus, told a conference call that a law that would make it easier for workers to form a union "is how a civilization disappears," and that any CEOs who didn't give copious money to keep Republicans in the Senate "should be shot."
Indeed, well over a generation into the great CEO pay grab, billionaires are increasingly focused on using their vast wealth to corrupt the democratic process to make sure that only pro-Wall Street politicians are elected, regardless of whether it's Republicans or 1-Percent friendly Democrats like New York's Cuomo. Langone didn't just oppose President Obama in 2012, but he brought together 50 of America's wealthiest people who pledged millions to support a challenge by New Jersey's GOP Gov. Chris Christie, the only candidate Langone thought could win. When Christie decided in 2011 not to run, the very first person he informed -- long before the people of the Garden State -- was Ken Langone.
Three years later, the brains behind the $31-million-a-year CEO look out his window at a gaggle of workers from McDonald's and Burger King marching for $15 an hour who would probably settle for now with $10,10, or $404 a week -- and they are terrified. Yet iIt seems ironic, counter-productive and even ridiculous for men like Langone who made a fortune when America had a thriving middle class to want so desperately now to hold workers down. Already, the lack of decent pay is crushing retailers like Sears and J.C. Penney -- how long before no one is left in the working classes who do their own home improvements to even shop at Home Depot...or afford a home, for that matter? How much then would Langone's stock even be worth?
But rather than seek an equitable solution, the billionaires of America are lashing out. They want to attack, and they want to burn.
Because they are about to lose.