In his latest for the New York Times, award-winning economist and best-selling author Paul Krugman chastises those members of the 1% who regard every proposal to raise their taxes as equivalent to a declaration of genocidal war. Krugman is thinking in particular of the recent comments from venture capitalist Tom Perkins, who was featured in the Wall Street Journal comparing the plight of the hyper-rich in America today to that of Jews in Nazi Germany, but he notes that among his class, Perkins' fear and hysteria is common.
" Mr. Perkins isn’t that much of an outlier," Krugman writes. "He isn’t even the first finance titan to compare advocates of progressive taxation to Nazis. Back in 2010 Stephen Schwarzman, the chairman and chief executive of the Blackstone Group, declared that proposals to eliminate tax loopholes for hedge fund and private-equity managers were 'like when Hitler invaded Poland in 1939.'"
"[T]here are a number of other plutocrats who manage to keep Hitler out of their remarks but who nonetheless hold, and loudly express, political and economic views that combine paranoia and megalomania in equal measure," Krugman notes. In other words: The crazy runs deep.
Krugman goes on to offer a theory as to why the 1% is so worked up over mainstream liberalism, and President Obama in particular. "I ... suspect that today’s Masters of the Universe are insecure about the nature of their success," Krugman argues. "We’re not talking captains of industry here, men who make stuff. We are, instead, talking about wheeler-dealers, men who push money around and get rich by skimming some off the top as it sloshes by." He wonders if, perhaps, these capitalist heroes are so touchy because they know, subconsciously, that their claims to such exaggerated levels of wealth and power are suspect at best.
Now, just to be clear, the very rich, and those on Wall Street in particular, are in fact doing worse under Mr. Obama than they would have if Mitt Romney had won in 2012. Between the partial rollback of the Bush tax cuts and the tax hike that partly pays for health reform, tax rates on the 1 percent have gone more or less back to pre-Reagan levels. Also, financial reformers have won some surprising victories over the past year, and this is bad news for wheeler-dealers whose wealth comes largely from exploiting weak regulation. So you can make the case that the 1 percent have lost some important policy battles.
Anyway, we’ve been here before. It’s impossible to read screeds like those of Mr. Perkins or Mr. Schwarzman without thinking of F.D.R.’s famous 1936 Madison Square Garden speech, in which he spoke of the hatred he faced from the forces of “organized money,” and declared, “I welcome their hatred.”
President Obama has not, unfortunately, done nearly as much as F.D.R. to earn the hatred of the undeserving rich. But he has done more than many progressives give him credit for — and like F.D.R., both he and progressives in general should welcome that hatred, because it’s a sign that they’re doing something right.