Income Inequality is Good for the Economy

[YankeeFan]

A former partner of Mitt Romney at Bain makes the case for inequality:

Ever since the financial crisis started, we’ve heard plenty from the 1 percent. We’ve heard them giving defensive testimony in Congressional hearings or issuing anodyne statements flanked by lawyers and image consultants. They typically repeat platitudes about investment, risk-taking and job creation with the veiled contempt that the nation doesn’t understand their contribution. You get the sense that they’re afraid to say what they really believe. What do the superrich say when the cameras aren’t there?

With that in mind, I recently met Edward Conard on 57th Street and Madison Avenue, just outside his office at Bain Capital, the private-equity firm he helped build into a multibillion-dollar business by buying, fixing up and selling off companies at a profit. Conard, who retired a few years ago at 51, is not merely a member of the 1 percent. He’s a member of the 0.1 percent. His wealth is most likely in the hundreds of millions; he lives in an Upper East Side town house just off Fifth Avenue; and he is one of the largest donors to his old boss and friend, Mitt Romney.

Unlike his former colleagues, Conard wants to have an open conversation about wealth. He has spent the last four years writing a book that he hopes will forever change the way we view the superrich’s role in our society. “Unintended Consequences: Why Everything You’ve Been Told About the Economy Is Wrong,” to be published in hardcover next month by Portfolio, aggressively argues that the enormous and growing income inequality in the United States is not a sign that the system is rigged. On the contrary, Conard writes, it is a sign that our economy is working. And if we had a little more of it, then everyone, particularly the 99 percent, would be better off. This could be the most hated book of the year.

Conard understands that many believe that the U.S. economy currently serves the rich at the expense of everyone else. He contends that this is largely because most Americans don’t know how the economy really works — that the superrich spend only a small portion of their wealth on personal comforts; most of their money is invested in productive businesses that make life better for everyone. “Most citizens are consumers, not investors,” he told me during one of our long, occasionally contentious conversations. “They don’t recognize the benefits to consumers that come from investment.”

http://www.nytimes.com/2012/05/06/magazine/romneys-former-bain-partner-makes-a-case-for-inequality.html?hp&pagewanted=all

 

[RickStain]

Converting the poor and middle classes to slave labor would be fantastic for the economy as well.

 

[Azrael]

War is peace. Freedom is slavery. Ignorance is strength.

 

[Michael_ Gee]

The evidence that a significant percentage of the American ultra-wealthy are sociopaths, and stupid ones, too, mounts daily. It's not enough to have everything for this guy, he wants people to say, "I wouldn't have anything without you, you big wonderful lug."
I read somewhere else today that there's been an increase in rich U.S. citizens attempting to change their citizenship to Swiss because of tax evasion enforcement. A positive development for the economy at last.

 

[RickStain]

The evidence that a significant percentage of the American ultra-wealthy are sociopaths, and stupid ones, too, mounts daily. It's not enough to have everything for this guy, he wants people to say, "I wouldn't have anything without you, you big wonderful lug."

Believing what's best for you is best for everyone isn't sociopathic. It's Human Nature 101.

 

[Azrael]

The evidence that a significant percentage of the American ultra-wealthy are sociopaths, and stupid ones, too, mounts daily. It's not enough to have everything for this guy, he wants people to say, "I wouldn't have anything without you, you big wonderful lug."

Believing what's best for you is best for everyone isn't sociopathic.

Wanting to be thanked and praised for your own self-interest is.

 

[dixiehack]

The usual suspects at brunch or something?

 

[LongTimeListener]

Ragu is going to be posting less here as the book tour kicks up.

 

[RickStain]

The evidence that a significant percentage of the American ultra-wealthy are sociopaths, and stupid ones, too, mounts daily. It's not enough to have everything for this guy, he wants people to say, "I wouldn't have anything without you, you big wonderful lug."

Believing what's best for you is best for everyone isn't sociopathic.

Wanting to be thanked and praised for your own self-interest is.

I'll remember that during the next thread about how underappreciated journalists are.

 

[Dick Whitman]

There was a University of Chicago professor a few months ago who made some waves on the Interwebs when he said in an interview that wide income inequality was good for society because it "incentivized" the poor to catch up.

 

[YankeeFan]

Are the comments posted so far in response to the headline, or a reading of the article?

I don't see any actual references to anything he said, or believes.

 

[LongTimeListener]

I read it. It's bull****. Maybe that world existed decades ago, but in these days when trading and derivatives and complex financial instruments are their own end, that world is long gone.

I assume that, like his buddy Mitt, this jackhole has significant money in the Caymans. What's that doing for the U.S. economy?

 

[YankeeFan]

I read it. It's bull****. Maybe that world existed decades ago, but in these days when trading and derivatives and complex financial instruments are their own end, that world is long gone.

I assume that, like his buddy Mitt, this jackhole has significant money in the Caymans. What's that doing for the U.S. economy?

Well, that was a point-by-point take down of the guy's entire philosophy!

 

[Ben_Hecht]

A former partner of Mitt Romney at Bain makes the case for inequality:

Ever since the financial crisis started, we’ve heard plenty from the 1 percent. We’ve heard them giving defensive testimony in Congressional hearings or issuing anodyne statements flanked by lawyers and image consultants. They typically repeat platitudes about investment, risk-taking and job creation with the veiled contempt that the nation doesn’t understand their contribution. You get the sense that they’re afraid to say what they really believe. What do the superrich say when the cameras aren’t there?

With that in mind, I recently met Edward Conard on 57th Street and Madison Avenue, just outside his office at Bain Capital, the private-equity firm he helped build into a multibillion-dollar business by buying, fixing up and selling off companies at a profit. Conard, who retired a few years ago at 51, is not merely a member of the 1 percent. He’s a member of the 0.1 percent. His wealth is most likely in the hundreds of millions; he lives in an Upper East Side town house just off Fifth Avenue; and he is one of the largest donors to his old boss and friend, Mitt Romney.

Unlike his former colleagues, Conard wants to have an open conversation about wealth. He has spent the last four years writing a book that he hopes will forever change the way we view the superrich’s role in our society. “Unintended Consequences: Why Everything You’ve Been Told About the Economy Is Wrong,” to be published in hardcover next month by Portfolio, aggressively argues that the enormous and growing income inequality in the United States is not a sign that the system is rigged. On the contrary, Conard writes, it is a sign that our economy is working. And if we had a little more of it, then everyone, particularly the 99 percent, would be better off. This could be the most hated book of the year.

Conard understands that many believe that the U.S. economy currently serves the rich at the expense of everyone else. He contends that this is largely because most Americans don’t know how the economy really works — that the superrich spend only a small portion of their wealth on personal comforts; most of their money is invested in productive businesses that make life better for everyone. “Most citizens are consumers, not investors,” he told me during one of our long, occasionally contentious conversations. “They don’t recognize the benefits to consumers that come from investment.”

http://www.nytimes.com/2012/05/06/magazine/romneys-former-bain-partner-makes-a-case-for-inequality.html?hp&pagewanted=all

A Bainer tries to justify prevailing levels of/opportunities for heads-I-win/tails-you-lose pillage.

The world (a) yawns, and/or (b) shakes its head in despair.

 

[TrooperBari]

I read somewhere else today that there's been an increase in rich U.S. citizens attempting to change their citizenship to Swiss because of tax evasion enforcement. A positive development for the economy at last.

Something like this?
http://www.reuters.com/article/2012/04/16/us-usa-citizen-renounce-idUSBRE83F0UF20120416

 

[qtlaw]

"most Americans don’t know how the economy really works — that the superrich spend only a small portion of their wealth on personal comforts; most of their money is invested in productive businesses that make life better for everyone."

I hope the author told him "dude, I know how the economy works. Don't spout that BS about how the superrich care about others. Who's buying the yachts, the jets, the Bentleys, the mansions? Does that make life better for everyone?" Gotcha.

Capitalism leads to inequality, I understand that. Just don't tell me that the exploitation of imperfect information (which leads to accumulation of wealth) "makes life better for everyone."

 

[lcjjdnh]

The article touches on this at the end, but he completely disregards what people are most concerned about. People, I think, still admire those that achieve their wealth through risk-taking and innovation--Steve Jobs, Bill Gates, etc. What they don't like is rent-seeking. He refuses to address that issue.

Further, he admonishes lawyers, but not investment bankers and management consultants, who took a similar treadmill path to "safe" jobs out of school. What risk was he taking going to Harvard Business School?

 

[Sam Mills 51]

There was a University of Chicago professor a few months ago who made some waves on the Interwebs when he said in an interview that wide income inequality was good for society because it "incentivized" the poor to catch up.

The professor must have been suffering from brain fade. Keeping up with the Joneses occurs among the wealthy ... we don't need class warfare to give anyone incentive.

 

[lcjjdnh]

The article touches on this at the end, but he completely disregards what people are most concerned about. People, I think, still admire those that achieve their wealth through risk-taking and innovation--Steve Jobs, Bill Gates, etc. What they don't like is rent-seeking. He refuses to address that issue.

Further, he admonishes lawyers, but not investment bankers and management consultants, who took a similar treadmill path to "safe" jobs out of school. What risk was he taking going to Harvard Business School?

His whining reminds me of Mitt Romney, too. His rags-to-riches tale involved only agreeing to head Bain Capital after Mr. Bain agreed to take all the risks.

 

[BitterYoungMatador2]

Are the comments posted so far in response to the headline, or a reading of the article?

I don't see any actual references to anything he said, or believes.