Henry Fuseli, The Nightmare, 1781
Hardly a week goes by without some billionaire sounding as if he was a French aristocrat whose name has been encoded into the scarf that Madame Defarge is knitting in Charles Dickens’s “A Tale of Two Cities”. It is as if the election of an Alexandria Ocasio-Cortez means that the guillotine blade is being sharpened just for them.
The first and most visible of these panic-stricken plutocrats was Howard Schultz who decided to run as an independent in 2020 because the Democrats were too far to the left. One of them is Elizabeth Warren who once asked him for a campaign contribution. He refused, telling MSNBC that “she believes in programs that will lead to a level of socialism in America.” Warren is on record as opposing socialism, whatever that means to her. Her preference is for a “capitalism with serious rules”. If you Google “Starbucks” and “false advertising”, you get 192,000 hits. Judges keep ruling in Schultz’s favor when civil suits are brought against his corporation. One of these judges, who cleared Starbucks of skimping on ingredients, also cleared the cops of using excessive violence against student protesters in 2011 at U. Cal, Berkeley. Imagine that. So the idea seems to be that it is not so much socialism he is worried about but an end to “capitalism with rules that favor the rich”, which has been its modus operandi for the past 500 years or so.
Michael Bloomberg, who has personal wealth in excess of 47 billion dollars (15 times that of Schultz), is also considering running for President in 2020 but as a Democrat, unlike Schultz. But like Schultz, he is kept up at night cowering under his blanket from the bogeyman Elizabeth Warren. With regard to her wealth tax, he told reporters: “We need a healthy economy, and we shouldn’t be embarrassed about our system. If you want to look at a system that’s non-capitalistic, just take a look at what was once, perhaps, the wealthiest country in the world, and today people are starving to death. It’s called Venezuela.”
I doubt that Bloomberg ever read Karl Marx but anybody who has concluded that there was socialism in Venezuela must have been reading Jacobin rather than V. 1 of Capital.
I worked on a project to automate the branch office of Salomon Brothers in London for Bloomberg back in 1975. When a co-worker learned that I was assigned to the project, she gave me a sour face. What’s wrong, I asked? She basically described the kind of person #MeToo would have protested back then if it had existed. On the trading floor at Salomon, there was a Latina secretary who used to deliver coffee to the traders. My co-worker, an African-American woman named Barrie, told me that as the secretary made her way across the floor, he would yell out “Look at the tits on that broad” or words to that effect. Last September, the Atlantic reported on “‘I’d Do Her’: Mike Bloomberg and the Underbelly of #MeToo” that makes clear nothing has changed with him:
From 1996 to 1997, four women filed sexual-harassment or discrimination suits against Bloomberg the company. One of the suits included the following allegation: When Sekiko Sakai Garrison, a sales representative at the company, told Mike Bloomberg she was pregnant, he replied, “Kill it!” (Bloomberg went on, she alleged, to mutter, “Great, No. 16”—a reference, her complaint said, to the 16 women at the company who were then pregnant.) To these allegations, Garrison added another one: Even prior to her pregnancy, she claimed, Bloomberg had antagonized her by making disparaging comments about her appearance and sexual desirability. “What, is the guy dumb and blind?” he is alleged to have said upon seeing her wearing an engagement ring. “What the hell is he marrying you for?”
Moving right along, we get someone whose personal wealth is a paltry two billion dollars. That’s Howard Marks, the CEO of Oaktree Capital, a company that made billions investing in “distressed properties” a decade ago. What is that, you ask? That’s the foreclosed houses that Steve Mnuchin profited from as well.
Marks made the news recently for publishing a memo to his clients about the danger posed by “socialism”, which you can read here. It seems that he has had trouble sleeping at night after reading a number of articles covering the rising popularity of socialism. One of them was written by the New Yorker’s editor David Remnick, who was well-known for spending most of the 1980s calling for the overturn of Soviet Communism. Of course, the USSR was not “communist” or “socialist” but a transitional society that was midway between capitalism and socialism. Apparently, Remnick is okay with “democratic socialism” since it boils down to the kind of welfare state found in Scandinavia in the 1960s and continued until recently when the money began to run out. Marks cites this passage from Remnick’s article:
In 2016, the Institute of Politics, at Harvard’s Kennedy School, polled people between the ages of eighteen and twenty-nine, and discovered that support for capitalism was surprisingly low. Fifty-one per cent of the cohort rejected capitalism; thirty-three per cent supported socialism. A later edition of the survey found that fifty-one per cent were “fearful about the future,” while only about twenty per cent were hopeful.
Maybe that fifty-one per cent worried about the future should get into the distressed properties racket. It worked out well for Marks, after all. He describes the post-WWII reality that began to collapse under the neoliberalism promoted by Democrats and Republicans:
As I see it, for the 60 years immediately following World War II, much of the world enjoyed a rising tide of prosperity that lifted all boats. That made nearly everyone economically content and thus happy with capitalism and free-market solutions. Even though some people did better than others, most did quite well. Living standards rose and the incidence of poverty declined. Ronald Reagan and Margaret Thatcher celebrated the efficacy of free markets, and the world agreed.
Those expecting a utopian transformation from the billionaire will be sorely disappointed:
Capitalism is an imperfect economic system, because differential performance in the pursuit of economic success – as well as luck – results in there being (a) some people who are less successful as well as some who are more and (b) a few who are glaringly successful. Obviously I’m someone who has profited from capitalism, so my views could be dismissed as hopelessly biased.
Yes, Mr. Marks, you are hopelessly biased. By the way, although with a Jewish background like the German revolutionary with a similar name, his parents raised him as a Christian Scientist, a faith they adopted in the 1930s.
In 2012, Marks moved into a 52-million dollar apartment in 740 Park Avenue, the most exclusive building in New York City. It is a sprawling two story affair with 30 rooms, including two libraries, eight bedrooms, 10 bathrooms, six terraces and a dining room. Not content with the place, he spent millions renovating it—thus creating a “living hell” for his fellow billionaires who lived beneath him as reported in Vanity Fair, a magazine that would disappear overnight if Warren’s wealth tax was ever passed.
The address 740 Park has, indeed, turned into a war zone for the .001 percent. The Tangs claim in the suit that they’ve been trapped in a world of deafening noise, irrepressible disruption, destruction to their own apartment, and great distress soon after Marks embarked on a massive renovation in 2012. Worse, perhaps, they feel their concerns have been ignored by Marks and the co-op board.
Though the building requires work take place between the hours of 8:30 A.M. and 5 P.M., and only between May and September, when many dwellers are presumably in Southampton, the suit alleges that Marks’s workers start as early as 6 A.M. and the project has gone on without interruption for four years, without regard to the time restrictions. “Miranda Tang [the wife of semiconductor magnate Hamburg Tang] has been abruptly awoken almost every morning before 9 a.m. by the sounds of heavy machinery, banging, crashing, hammering, and drilling, which shook her out of bed and prevented her from being able to rest and sleep peacefully in any bedroom,” the suit says. She has even tried going back to sleep in other bedrooms in her duplex, to no avail. The noise is just too loud.
Howard Marks’s apartment at 740 Park Avenue
But that’s not the fanciest pad in the building. That belongs to Stephen Schwarzman, the CEO of Blackstone whose personal wealth is $13.3 billion. He has 34 rooms on the top two floors in a penthouse apartment that used to belong to John D. Rockefeller Jr. Schwarzman, like the three other men above, was a Jew ethnically and from a middle-class family. He shared their ostentatiousness but to the point of abnormal psychology. This is not a tendency peculiar to my brethren. Just look at the life-style of John D. Rockefeller, who was the son of an impoverished snake oil medicine salesman in the 19th century. I guess it is a function of being nouveaux riche.
Stephen Schwarzman and his pal Donald Trump
Schwarzman is notorious for the birthday parties he throws for himself. His seventieth, celebrated two years ago this month, came on the heels of Donald Trump’s demagogic attacks on Wall Street in the prior year’s election. Schwarzman and Trump are good friends, rather unsurprisingly. Both are grifters with a huge appetite for self-aggrandizement. The NY Times reported on the party:
Partygoers feasted on short ribs, while two camels wandered along a stretch of sand and a gondolier propelled his craft across the pool. Guests were treated to a 12-minute fireworks display that could be seen across Lake Worth Lagoon. To top off the evening at what is just one of the multibillionaire’s many homes, Gwen Stefani sang “Happy Birthday to You” before taking a quick twirl with the birthday boy around a dance floor constructed inside a two-story tent where acrobats shimmied and jumped.
The cost? A person familiar with the planning who was not authorized by the host to speak on the record estimated it at between $7 million and $9 million.
The guests had cocktails in the entry hall before moving on to the dining area, where later they ate cake sculpted in the shape of a Chinese temple with a dragon curled around the edges of the roof, according to one guest. The day after the celebration, some 150 people attended a private lunch hosted by Mr. Schwarzman.
And what about the camels? Mr. Fulk estimated they cost $1,500 apiece. “We’ve had a few camels at parties, too,” he said with a laugh.
Many of the guests at Mr. Schwarzman’s party were affiliated with the new White House, among them Mr. Trump’s daughter and son-in-law, Ivanka Trump and Jared Kushner, and his cabinet picks Steve Mnuchin, Wilbur Ross and Elaine Chao, according to Bloomberg. The Schwarzmans sat together at their table with David Koch, the businessman and supporter of conservative causes, who sat to the left of Mr. Schwarzman’s wife, Christine Hearst Schwarzman. Ivanka Trump was seated to Mr. Schwarzman’s right.
On January 23rd, Schwarzman was interviewed by Maria Bartiromo on the Fox Business channel network. She asked him about the political environment. What did he think of “these new ideas and this new focus by younger generations of socialism? I mean, you’ve got Alexandria Ocasio-Cortez coming out, talking about a 70 percent tax rate which of course would be double where we are right now in terms of the highest earners. We know that the highest earners already pay 80 percent of the tax. But your reaction to some of this new focus that we’re seeing from the Democrats on socialism?”
Like all these other plutocrats, he said that “those kinds of economies” have not worked out well. “As you go further out, towards communism, as you move further left, that’s resulted in failing almost everywhere economically.”
You get a good idea of how Blackstone exploits “capitalism with rules that benefit the wealthy” from how it operated in Great Britain, taking advantage of the neoliberalism that prevailed under Conservative and New Labour alike.
In the late 1990s, “care homes” underwent privatization in England. These were basically old-age homes that had formerly been part of the National Health System but were eating a large part of a dwindling budget. As is commonly understood, most health care costs are associated with the elderly. The largest company trying to profit over the nursing home business was Southern Cross that had been formed in 1996 by one John Moreton, a man who had made a fortune in North Sea oil investments at a young age. Just the kind of background needed for caring for dementia patients.
Six years later Southern Cross was sold to Blackstone for £162 million. Blackstone then aggressively began acquiring other care home properties in order to corner the market, a typical move by private capital firms. When the financial crisis hit in 2009, England was affected. As the income of many families decreased sharply, the ability to put an elderly family member in a care home decreased accordingly. This meant that dwindling occupancy rates reduced the revenue stream. So, Blackstone decided to defer 30 percent of its rent on its nursing homes for three months to stay in business.
Corners were cut everywhere to keep Southern Cross profitable, particularly in the care for the elderly that was their objective. Surely, Schwarzman was anxious to keep the money flowing in. There were those birthday parties that had to be paid for.
In 2011, the Orchid View care home in Copthorne, West Sussex was the subject of an investigation after 19 elderly patients died as a likely result of neglect and ill-treatment. Specializing in care for dementia patients, institutionalized abuse developed in a perfect storm combining underfunding and the routine indifference to marginalized patients. The BBC reported on Orchid View in 2013, long after Blackstone had walked away from its asset-stripping operation:
Andrea Sutcliffe, the CQC’s chief inspector of adult social care, said she had ordered a “root-and-branch review” of the organisation’s actions in relation to Orchid View.
While summing up, Ms Schofield said she had found that medical documents for resident Jean Halfpenny, 77, were falsified and that she was given too much of the blood-thinning drug warfarin.
Home manager Meera Reed had earlier denied ordering staff to shred documents and filling in new forms to cover up the overdose.
Continuing, the coroner said that another resident was found naked and in pain with his catheter twisted, while a family member found staff eating toast and drinking tea with their feet up.
This fucking bum Stephen Schwarzman was one of the billionaires attending the Davos World Economic Forum this year. He addressed the oncoming revolution in artificial intelligence that will wipe out as much of 40 percent of jobs. His answer to this, as he told Maria Bartiromo, was to donate to MIT where advanced technology could help create jobs for those lucky enough to survive the cuts. The rest be damned.
Clearly, Schwarzman was aware of the growing anger directed against him all these other bastards. Bloomberg News, the company owned by Schwarzman’s fellow plutocrat, reported on the jubilant mood there, ten years after the Great Recession had supposedly given way to a “great economy” as Schwarzman’s pal Donald Trump would put it.
Billionaire success was difficult to envisage a decade ago, when the gathering was marked by fear, anger and bitterness.
“Everyone I spoke to says it’s the grimmest Davos they’ve ever been to,” academic Kenneth Rogoff said at the 2009 meeting. “The mood has been very depressed.”
However, there were dark clouds on the horizon. The article concluded on this note:
Even as the meeting’s reports and agendas have repeatedly flagged inequality as one of the chief risks to a stable society, the global economy’s bifurcation has only quickened.
“The financial crisis was the kind of event that shakes things out, but it didn’t happen 10 years ago,” said Anand Giridharadas, author of ‘Winner Takes All: The Elite Charade of Changing the World.’ “The same rigging that caused the crisis ensured the losses were socialized.”
For those with minimal or no assets, it’s been a more challenging decade. Wages have stagnated and while equity markets have risen, fewer U.S. adults are invested in the stock market than in 2009. Compensation for chief executive officers in America’s largest firms is now 312 times the annual average pay of the typical worker, compared with about 200 times in 2009, 58 times in 1989 and 20 times in 1965, according to a 2018 report by the Economic Policy Institute.
In the middle of the night, people like Schwarzman, Marks, Schultz and Bloomberg must wake up with their silk pajamas drenched in sweat. They must be aware of what is going on in France. The Yellow Vests are the result of their French counterparts pushing too far. As is generally the case under capitalism, a pre-revolutionary period is ushered in by the utter indifference to suffering by the ruling class. When told that the masses lacked bread, Marie Antoinette said “Let them eat cake”. When Wilbur Ross was told that government workers could not pay their rent during last month’s shutdown, he asked why they couldn’t take out a loan. Isn’t it time for Madame Defarge to take up knitting again?
