How the Richest of the Rich Got That Way With No Help From Anyone

The New York Times pays homage to “The Richest of the Rich: Proud of a New Gilded Age“:

The tributes to Sanford I. Weill line the walls of the carpeted hallway that leads to his skyscraper office, with its panoramic view of Central Park. A dozen framed magazine covers, their colors as vivid as an Andy Warhol painting, are the most arresting. Each heralds Mr. Weill’s genius in assembling Citigroup into the most powerful financial institution since the House of Morgan a century ago.

His achievement required political clout, and that, too, is on display. Soon after he formed Citigroup, Congress repealed a Depression-era law that prohibited goliaths like the one Mr. Weill had just put together anyway, combining commercial and investment banking, insurance and stock brokerage operations. A trophy from the victory — a pen that President Bill Clinton used to sign the repeal — hangs, framed, near the magazine covers.

These days, Mr. Weill and many of the nation’s very wealthy chief executives, entrepreneurs and financiers echo an earlier era — the Gilded Age before World War I — when powerful enterprises, dominated by men who grew immensely rich, ushered in the industrialization of the United States. The new titans often see themselves as pillars of a similarly prosperous and expansive age, one in which their successes and their philanthropy have made government less important than it once was.

“People can look at the last 25 years and say this is an incredibly unique period of time,” Mr. Weill said. “We didn’t rely on somebody else to build what we built, and we shouldn’t rely on somebody else to provide all the services our society needs.”


“I once thought how lucky the Carnegies and the Rockefellers were because they made their money before there was an income tax,” Mr. Weill said, never believing in his younger days that deregulation and tax cuts, starting in the late 1970s, would bring back many of the easier conditions of the Gilded Age. “I felt that everything of any great consequence was really all made in the past,” he said. “That turned out not to be true and it is not true today.”

Isn’t it astonishing that Weill can say he made his fortune all by himself, without help from anyone, when we have just been told how he used his “political clout” to get Congress to “[repeal] a Depression-era law that prohibited goliaths like the one Mr. Weill had just put together anyway, combining commercial and investment banking, insurance and stock brokerage operations…”? With the pen Pres. Clinton used to sign the repeal into law hanging framed on the wall to trumpet Weill’s success in changing the law to allow wealthy businessmen like himself to rely on the government in just the manner he claims they never did?

“Do they seriously believe,” Kevin Drum asks, “that American executives in the 50s and 60s just coasted along on waves of cash while they — well, they not only had a world red in tooth and claw to tame, but were responsible for personally taming it without help from any other human being on the planet? Apparently so,” he concludes, quoting this section from the Times article:

The new tycoons describe a history that gives them a heroic role. The American economy, they acknowledge, did grow more rapidly on average in the decades immediately after World War II than it is growing today. Incomes rose faster than inflation for most Americans and the spread between rich and poor was much less. But the United States was far and away the dominant economy, and government played a strong supporting role. In such a world, the new tycoons argue, business leaders needed only to be good managers.
That changed with the arrival of “the technological age,” in Mr. Frankfort’s view. Innovation became a requirement, in addition to good management skills — and innovation has played a role in Coach’s marketing success. “To be successful,” Mr. Frankfort said, “you now needed vision, lateral thinking, courage and an ability to see things, not the way they were but how they might be.”

That, and the above-mentioned repeal of the Glass-Steagall Act, and lots of government handouts in the form of generous tax cuts. Unsurprisingly, the “richest of the rich,” despite having done it all on their own, with no help from government, are very much opposed to reversing these tax cuts:

The new tycoons oppose raising taxes on their fortunes. Unlike Mr. Crandall, neither Mr. Weill nor Mr. Griffin nor most of the dozen others who were interviewed favor tax rates higher than they are today, although a few would go along with a return to the levels of the Clinton administration. The marginal tax on income then was 39.6 percent, and on capital gains, 20 percent. That was still far below the 70 percent and 39 percent in the late 1970s. Those top rates, in the Bush years, are now 35 percent and 15 percent, respectively.

“The income distribution has to stand,” Mr. Griffin said, adding that by trying to alter it with a more progressive income tax, “you end up in problematic circumstances. In the current world, there will be people who will move from one tax area to another. I am proud to be an American. But if the tax became too high, as a matter of principle I would not be working this hard.”

Tell that to the millions of people working 18-hour days for 40 cents an hour.

Cross-posted at Liberty Street.


Filed under 05_kathy

15 responses to “How the Richest of the Rich Got That Way With No Help From Anyone

  1. Angelos

    But if the tax became too high, as a matter of principle I would not be working this hard.

    That right there is the crux of it.

    You know, why “work so hard” for my $20,000,000 when I “only” get to take home $10,000,000.

    Like he’ll go take a teaching job at $40,000, just to keep all that money out of the government’s hands.

  2. Kathy Kattenburg

    Exactly. Very well said.

  3. Angelos

    Thanks, but this is a slam-dunk topic! That attitude has always pissed me off. Now, put me right at the front of the line to bitch about the government wasting my money, as in right now in Iraq. But taxes in general as a bugaboo? Or the concept that I’ll try to earn LESS MONEY because of them! Argh.

    I’ve made $8000 in a year, I’ve made $130,000 in a year. I never wished I’d go back to $8000 because I didn’t pay any taxes.

    Toast has a funny post about this.

  4. Sakurai

    Ah, the old “if you tax me more, it won’t be worth it to do this job” threat. I’d take that job at a hundredth of your salary, buddy, and so would millions of other people, so excuse us if we don’t weep and gnash our teeth at the thought you might leave. (Assuming he even needs a replacement – I can’t tell from the article, but is he actually serving a function beyond making himself rich? I know that insurance, investment etc. have a purpose in society, obviously, but is he personally actually doing any work besides manipulating things for his own advantage? If he is, it’s not mentioned.)

  5. nightshift66

    Like Angelos, I’ve had wild income fluctuations in my life. The very suggestion that tax rates have ever in my lifetime been sufficiently confiscatory to justify reducing my income is delusional. At 90%, maybe; at 38% top marginal rate? Please, throw me in that briar patch.

    I work in local government, and the conservative masses truly are indoctrinated. They will revolt if property taxes creep up $10 a year, but whine constantly that the roads are in poor repair and there aren’t enough police. So I dutifully try to educate them about the connection between taxes and services, and you’d think that I whipped it out and whizzed in church on the altar. There is a lot of magical ‘thinking’ out here.

  6. Jaclyn

    well nightshift, if they weren’t overpaying those lazy unionized teachers that only work 9 months a year, they wouldn’t need to raise taxes.
    Argh. Argh argh argh argh.
    It’s like listening to my parents, and they aren’t even here.

  7. Well I was born in 1934 and you an believe your sweet ass we didn’t see any of this fucking golden age this cocksucker Sanford I. Weill talks about. And we didn’t pay any taxes at all because we didn’t have any fucking income thanks to pricks like him. In 1930 or ’31 Herbert Hoover gave Charles G Dawes, former vice president under Cooledge 8 million dollars to save his fucking Chicago bank, (It went broke anyway but I’m pretty certain Mr. Dawes came out all right.) which was more money than was spent on all forms of welfare combined in the same year.
    When I was 5 years old I lived in a tent because the fucking banks had defaulted and all my grandparents savings went down the shitter so they couldn’t pay their mortgage and the county took their houses (3) because they could not pay the property tax. But did the bank president go to prison for stealing our money? In a pigs arse he did. When I was 6, in 1940, I went to school in a one room school where we had one teacher and eight grades in the same room. Why? Because nobody paid taxes where I lived because they didn’t have a job and couldn’t.
    At least when the crash came in ’29 some of the bastards like this Weill had the decency to jump off the top of a tall building but again, you can bet your sweet butt this asswipe won’t be one doing that when it happens again.

  8. Adnan Y.

    Anyone else hearing a malicious cackling emanating from Kensico Cemetery???

  9. carol

    Jaclyn- I hope you were kidding about teachers. Most of the teachers I know work 12 months a year. They must every summer go to classes for professional development, in order to maintain “highly qualified” status in order to comply with No Child Left Behind that our federal government mandates, but does not pay for. Of course, teachers have to pay for this extra education on their own. So while they are attedning summer classes, they are also working summer jobs; like waiting tables or pick up office work. Furthermore, I’ve been a public school teacher; and if you think that you get off work at 3 pm and then don’t spend the rest of the night grading papers, preparing lesson plans, dealing with kids parents, tutoring kids because no one else cares; then you clearly don’t know what you’re talking about.

    I live in Alabama. That’s the way it is here. But I doubt it’s much better in most other states.

  10. The fallacious “I did it all on my own” meme permeates our society.

    I teach at a state university, and sometimes in discussions students will get on this same tear: I’m doing it all on my own, unlike those lazy welfare queens who expect the government to give them a handout.

    This from people who are getting their educations subsidized by the government.

  11. oddjob

    well nightshift, if they weren’t overpaying those lazy unionized teachers that only work 9 months a year, they wouldn’t need to raise taxes.

    But God forbid I should have to send my children to school for 12 months! What, no summer vacation????

  12. Carol, I’m pretty sure there was a large helping of sarcasm in Jaclyn’s comment. I too live in Alabama, and I know you’re aware of how truly screwed up our tax system is here. I’m fortunate to live in a more affluent area where the residents care passionately about the quality of the schools and are willing to pony up (relatively) high property taxes to maintain that quality. But mention tax reform that would put statewide school funding on a more stable footing, and you get the same reaction nightshift mentioned. It’s as if some of the people here think they — and their children — will always live in a bubble that protects them from exposure to undereducated “riffraff”.

  13. Like he’ll go take a teaching job at $40,000, just to keep all that money out of the government’s hands.

    Nope, what I heard was when the taxes go up (and they HAVE to go up) he’ll buy his very own Carribean island and move there. Cause that’s cheaper than taxes, and all that golden beautiful money is all HIS and noone else’s

  14. I’m glad someone took this homage to task. I caught a glimpse of the story from the corner of my eye – actually, at work, while I was crouching by the newspaper rack, restocking beverages at the summer job I took to offset grad school costs. I caught the words “didn’t rely on someone else”, and it made me physically wince.
    Wealth privilege is a curious example of an is-ought problem. “Well, we *are* rich, so obviously we *deserve* to be rich! Either God favors us, or we worked hard for it, or we come from a superior race, or perhaps some combination of all three.” But they aren’t the only ones trained, from a very young age, that To Dream Is To Do, and to Achieve is to Succeed, and that any of those things can be achieved by hard work and conviction. Schoolchildren aren’t really taught that you have to spend money to make money, and that you have to have money to spend it, and so forth. I suppose it’s not surprising that wealthy men and their admirers choose not to learn that.

    Carol, I taught high school in New Orleans, and things were pretty similar there. One difference is that we had in-service days scheduled throughout the year where we went to camp – I mean, professional development – instead of school. Public NOLA schools were pretty hellbent on having at at least two consecutive “days off” a month, for anything from PD to Mardi Gras. It helped lubricate the long excruciating and often pointless drag of yearlong test prep.

    Oh, and dangling on topic by a thread – I recently read a letter to the editor from someone (obviously, not a teacher) who averred that teachers don’t like NCLB because it holds them accountable for teaching even children with behavioral problems.
    No. Teachers have always been acountable for teaching children with behavioral problems. Teachers are against NCLB for a lot of reasons, but a BIG one is that the government enforcing the test-test-test policy takes no accountability of its own!

  15. Grumpy Old Man, didn’t Charles Dawes compose the melody for “It’s All in the Game”? I know they didn’t write lyrics for it until after he died, but it was still widely played as an instrumental piece (composed in 1912) even before that. In any case, I’m sure his estate ain’t hurtin.’

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