On the Record From Inside a Gilded Bubble

Bloomberg News profiles the beleaguered ultrarich

Bloomberg’s Max Abelson has quite an eye for the ridiculous.

He’s dug up an AIG executive’s blame-shifting for the financial crisis, called out Meredith Whitney’s gibberish on muni bonds, and got a senior Wall Street exec to sputter with rage over that time Obama called them fat cats.

Today, Abelson has one of his best yet, reporting on how some of the super-elite are on the attack against the 1 percent meme.

What makes this story very good is that Abelson has found some of the least self-aware people you can imagine and got them on the record, either himself or via others’ interviews. Take Blackstone multibillionaire Stephen Schwarzman, whom he quotes from Bloomberg TV bemoaning the fact that poor and lower-income people don’t pay federal income tax (almost all of them do federal payroll taxes and the like). That was in response to a question about whether he, who Abelson points out surely pays just a 15 percent tax rate on much or most of his income, should pay more taxes.

The quotes alone make this piece worthwhile, but Abelson’s attention to detail makes it even better. He sits down with Ayn Rand-loving former BB&T CEO John Allison, who has co-founded something called the Job Creators Alliance that gets lots of airtime on Fox News and Fox Business, and who is aggrieved by the provision of Dodd Frank that requires companies to disclose its CEO-to-median-employee pay ratio. He calls something that could be done with an Excel spreadsheet and an hour or two “incredibly wasteful.” The point, of course, is that forcing such disclosure might help keep executive paydays, which are incredibly wasteful to shareholders (the owners of capital) down.

Abelson is also good to track down Leon Cooperman, the hedge fund manager who wrote the open letter to President Obama about how his feelings were hurt or something:

Cooperman, 68, said in an interview that he can’t walk through the dining room of St. Andrews Country Club in Boca Raton, Florida, without being thanked for speaking up. At least four people expressed their gratitude on Dec. 5 while he was eating an egg-white omelet, he said.

Then there’s Home Depot co-founder Ken Langone, speaking forthrightly from his Manhattan dressing room:

“I am a fat cat, I’m not ashamed,” he said last week in a telephone interview from a dressing room in his Upper East Side home. “If you mean by fat cat that I’ve succeeded, yeah, then I’m a fat cat. I stand guilty of being a fat cat.”

And the billionaire founder of Paychex Incorporated with his thirty-something ex-tennis star (Monica Seles) girlfriend who wants to vomit when he hears about paying his “fair share” is fun stuff.

Bloomberg and Abelson are good to note that not all of the very well-to-do are so defensive, pointing to Warren Buffett, who called for his taxes to be raised, and billionaire Nick Hanauer, who wrote a remarkable column for Bloomberg showing how the PR about “job creators” is misleading. It’s worth quoting Hanauer from earlier this month:

Since 1980, the share of the nation’s income for fat cats like me in the top 0.1 percent has increased a shocking 400 percent, while the share for the bottom 50 percent of Americans has declined 33 percent. At the same time, effective tax rates on the superwealthy fell to 16.6 percent in 2007, from 42 percent at the peak of U.S. productivity in the early 1960s, and about 30 percent during the expansion of the 1990s. In my case, that means that this year, I paid an 11 percent rate on an eight-figure income.

That’s the backdrop for the fascinating quotes Abelson gets on the record here from people inside a gilded bubble.

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Ryan Chittum is a former Wall Street Journal reporter, and deputy editor of The Audit, CJR's business section. If you see notable business journalism, give him a heads-up at rc2538@columbia.edu. Follow him on Twitter at @ryanchittum. Tags: , , , ,