This has been the decade of the billionaire victim

In 2010, banks foreclosed on a more than a million homes. The jobless rate for the year hovered just under 10 per cent. But billionaire investor Stephen Schwarzman knew who the real injured party was: the wealthy.

When the Obama administration proposed closing the carried interest loophole, a tax break exploited by those in private equity, Schwarzman couldn’t contain himself any longer. “It’s like when Hitler invaded Poland in 1939,” he claimed at a New York City gathering.

When the Obama administration proposed closing a loophole exploited by those in private equity, Blackstone co-founder Stephen Schwarzman made an infamous quip.
When the Obama administration proposed closing a loophole exploited by those in private equity, Blackstone co-founder Stephen Schwarzman made an infamous quip.Credit:Bloomberg

This wasn’t the tea party, hiding its elite funders under the cover of representing the common man or woman. This was one of the wealthiest men in the United States stepping forward to loudly, proudly and angrily claim he’d been done wrong.

Schwarzman quickly apologised. But if we want to understand how the Great Recession led not to an economic overhaul but to record-breaking inequality and the election of Donald Trump – a-to-the-manor-born serial con artist and practitioner of the 1 per cent whine nonpareil – it’s helpful to remember Schwarzman, who turned out to be patient zero for what might just be the decade’s ultimate grift: the rise of millionaires and billionaires as victims.


The Great Recession was supposed to embarrass the wealthy into slinking away embarrassed, grateful they didn’t land in jail or worse. “There’s an angry mob with pitchforks assembling, and they want to see some heads on pikes,” Fortune opined in 2009. But as the stock and real estate markets recovered, so did the self-regard of the most moneyed among us. Shame? That was so Dow 7,550. It’s now over 28,000.

The Trump administration boasts the wealthiest presidential Cabinet ever assembled.
The Trump administration boasts the wealthiest presidential Cabinet ever assembled.Credit:AP

Schwarzman has many a compatriot. Elite gatherings such as the Milken Institute’s Global Conference and the annual World Economic Forum in Davos have become all but encounter sessions for misunderstood multimillionaires and billionaires to agree with one another in the face of calls that they pay their fair share. There’s private equity mogul Leon Cooperman, who actually began to cry on CNBC when complaining about Sen. Elizabeth Warren’s proposed wealth tax on fortunes in excess of $US50 million. “I don’t need Elizabeth Warren telling me that I’m a deadbeat and that billionaires are deadbeats,” he said.

The rich victims are all around us. Craig Hall, the real-estate tycoon owner of the now infamous ostentatious Northern California wine cave where Pete Buttigieg held a high-dollar fundraiser? He told The New York Times about the criticisms, “It’s just not fair.” Jacqueline Sackler, wife of a Purdue Pharma heir, the company in part responsible for the opioid epidemic that’s taken the lives of hundreds of thousands of Americans? The Wall Street Journal got a hold of an email in which she complained of what she calls the “situation” is “destroying” the family’s reputation, and “dooms” her children.

And no one is more practiced at the art of billionaire self-pity than our president. He’s the victim of a Democratic “witch hunt.” Impeachment? “More due process was accorded to those accused in the Salem Witch Trials.” Yet he signed into law a tax plan so favorable to billionaires in general, and real-estate interests in particular, it might as well have been tailored precisely for him.

But according to Republicans, the obscene gains of the wealthy aren’t the problem. In 2012, GOP presidential nominee and multimillionaire Mitt Romney, speaking to a group of big-money donors, referred to 47 per cent of Americans who didn’t pay federal taxes and needed government benefits to get by as “takers,” adding, they believe “they are entitled to health care, to food, to housing, to you-name it.” (Entitled to food! Imagine that.)

The Trump administration, which boasts the wealthiest presidential Cabinet ever assembled, has spent almost three years attempting to make it harder for people to receive Medicaid, food assistance and even a free lunch at school. They are aided by self-appointed watchdogs, too, such as Minnesota retiree Rob Undersander, who outed himself as a millionaire so he could publicise the supposedly pressing issue of people who have six- and seven-figure net worth receiving food stamps because their income is below eligibility thresholds. (In fact, survey research shows such households account for about 3 per cent of households receiving assistance via the Supplemental Nutrition Assistance Program).

Meanwhile, of course, the wealthy make out. Studies show, not surprisingly, that their opinions carry much more weight with politicians than those of more ordinary voters. But the claim of victimisation is one way they seek to protect themselves from some popular anger and the financial consequences they might otherwise face, ensuring their power, wealth and privilege remains intact while they can continue to promote their self-perceived unique virtue and smarts. Here’s one telling example: Despite Trump’s campaign promises, the carried interest loophole remains a part of the federal tax code. Steve Schwarzman, your infamy was not in vain.

The Washington Post

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