Wealth

Tom Perkins, Obamacare, and the Paranoid Rage of the One Percent


Tom Perkins at TechCrunch Disrupt SF 2013 on Sept. 11, 2013

Photograph by Steve Jennings/Getty Images for TechCrunch

Tom Perkins at TechCrunch Disrupt SF 2013 on Sept. 11, 2013

By now you’ve heard about the risible comments from Tom Perkins, billionaire co-founder of the venture capital firm Kleiner Perkins Caufield & Byers, who, in a Jan. 25 letter to the Wall Street Journal, likened the “progressive war on the American one percent” to the persecution of Jews in Nazi Germany. Perkins’s comments tore across social media, and by last night he had been roundly condemned by just about everyone, including his old firm.

Undaunted, Perkins doubled down on the Nazi comparison today in an e-mail to Bloomberg News: “In the Nazi area it was racial demonization, now it is class demonization,” he wrote.
 
Perkins is hardly the first rich person to espouse paranoid fantasies of a totalitarian government marching in to seize his wealth, nor even the first to invoke Nazi Germany. Indeed, one bizarre mystery of the Obama era is how, exactly, a class of financiers whose wealth shields them from the effects of practically any government policy has come to develop such a powerful persecution complex. Over at Talking Points Memo, Josh Marshall has written a thoughtful essay diagnosing the trend Perkins exemplifies:

“I first started noticing this when I saw several years ago that many of the wealthiest people in the country, especially people in financial services, not only didn’t support Obama (not terribly surprising) but had a real and palpable sense that he was out to get them. This was hard to reconcile with the fact that Obama, along with President Bush, had pushed through a series of very unpopular laws and programs and fixes that had not only stabilized global capitalism, saved Wall Street but saved the personal fortunes (and perhaps even the personal liberty) of the people who were turning so acidly against him. Indeed, through the critical years of 2009, 10 and 11 he was serving as what amounted to Wall Street’s personal heat shield, absorbing as political damage the public revulsion at the bailout policies that had kept Wall Street whole.”

Marshall suggests three causes of this outrage: the collapse in bankers’ stature, as the worshipful 1990s-era “Masters of Universe” fluff gave way to blame and resentment for causing the global financial crisis; the estrangement and alienation that comes from being so wealthy that you’re essentially divorced from societal norms, which Marshall calls “socioeconomic acrophobia”; and a kind of post-traumatic stress disorder induced by the financial crisis, which forced these financiers to realize that they’re not invincible.

It may sound nuts, but I’d add a fourth cause: Obamacare. Any journalist who’s written about the health-care law with anything less than screaming contempt has probably been on the receiving end of angry e-mails from the type of people you’d ordinarily expect to have a firmer grip on the tiller. I don’t mean that educated, credentialed financiers can’t or shouldn’t oppose the law—that’s fine. But you generally don’t expect bug-eyed, apocalyptic screeds to come from quite this sort of person. My steady stream of hate mail provides a useful, fascinating, unvarnished glimpse at the psyche of people like Perkins. It’s convinced me that, even though Perkins doesn’t mention it in his letter, Obamacare is actually the key to understanding why they think the way they do.

Why, you may wonder, is Obamacare perceived as such a threat by a class of people who couldn’t possibly be affected by it in any material way? Good question. Not long ago, I got a classic anti-Obamacare rant from a prominent investor that, along with some other choice rants and e-mail exchanges with my interlocutors, put the puzzle pieces together to help explain how a law whose overall effects most people would view as pretty modest has been elevated by a few to world-historic significance on a par with Nazi Germany.

Here goes: Obamacare had major effects on the health-care industry, which makes up 17 percent of the economy. It was introduced by a liberal president and passed Congress with strictly Democratic support. It’s paid for by a modest (3.8 percent) tax increase on dividends and capital gains that hits only the wealthiest Americans and a similarly modest tax on business (medical devices, etc.). Never mind that the circumstances that allowed the law to pass by the skin of its teeth—total Democratic control of Washington with a filibuster-proof Senate majority—were fleeting and unlikely to be repeated. Or that tweaking the health-care system is a far cry from seizing people’s fortunes. From a certain paranoid angle, Obamacare can be viewed as a warm-up act, a test run, for the day when the libs will go after not just 17 percent of the economy, but the whole enchilada, and won’t settle for a piddling 3.8 percent of your passive income gains, but will take every last dollar.

I’d further posit that this view is especially acute among some of the ultrarich, because they’re sophisticated investors who can see the markets reacting positively to Obamacare—the money pouring into health-care exchange-traded funds, for instance, which has more than doubled from $7 billion to $16 billion since the Supreme Court upheld the law in 2012. Or the major investments that private equity firms are making in post-acute-care companies, which will benefit from the law in a big way. Their financial sophistication robs them of the comforting fantasy that Ted Cruz will come galloping in on a white steed to save America in 2016, which is the conviction of most of people who e-mail from AOL accounts or tweet at me with Gadsden Flag avatars.

In other words, they know Obamacare isn’t going to be repealed. And that terrifies them and prompts Nazi analogies because it’s proof that Obama and his army of “class demonizers” can achieve what they set out to.

Green_190
Green is senior national correspondent for Bloomberg Businessweek in Washington. Follow him on Twitter @JoshuaGreen.

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