They see government might do something, like an 80% tax on high incomes, and believe business must self-correct or the government will
Ken Langone(Credit: AP/Richard Drew)
I’ve written previously about the growing fear among elites that they’ve pushed economic inequality too far. That fear is proliferating, according to a New York Times Op-Ed this weekend by former marketing conglomerate CEO Peter Georgescu. Joined by his friend Ken Langone, founder of Home Depot, Georgescu warns his fellow 1 percenters that “[w]e are creating a caste system from which it’s almost impossible to escape.” The column raises the specter of “major social unrest” if inequality is not addressed.
Georgescu writes:
I’m scared. The billionaire hedge funder Paul Tudor Jones is scared. My friend Ken Langone, a founder of the Home Depot, is scared. So are many other chief executives. Not of Al Qaeda, or the vicious Islamic State or some other evolving radical group from the Middle East, Africa or Asia. We are afraid where income inequality will lead.
In June, Cartier chief Johann Rupert — worth an estimated $7.5 billion — delivered the same message to his wealthy colleagues, telling them that the intensifying inequality and what it portends “keeps me awake at night.” He told his fellow elites that “We are destroying the middle classes at this stage and it will affect us.” Like Georgescu and Langone, Rupert feared unrest and asked, “How is society going to cope with structural unemployment and the envy, hatred and the social warfare?”
But while Rupert only mused about the prospects for continuing to hawk jewelry and the restfulness of his nights amid the tumult, Georgescu and Langone are being proactive. Georgescu writes that he and Langone “have been meeting with chief executives, trying to get action on inequality,” taking advantage of Langone’s tremendous access to business leaders. “You’d be hard-pressed to find a major CEO that wouldn’t take his call,” said a close associate of Rudy Giuliani of Langone in 2012. Georgescu and Langone are telling their patrician peers that if “inequality is not addressed, the income gap will most likely be resolved in one of two ways: by major social unrest or through oppressive taxes.” The word seems to be getting around at the global aristocracy’s water cooler, and Georgescu writes that they “find almost unanimous agreement on the nature of the problem and the urgent need for solutions.”
It is remarkable that Langone is partnered with Georgescu on this crusade for social justice. Langone served on the board of a leading populist philanthropy group called the New York Stock Exchange, and his deep concern for the downtrodden led him to chair that gang of do-gooders. He’s a longtime generous contributor to Republican presidential candidates who have been on the front lines of the battle to institute supply-side and neoliberal economics. “[T]here’s nobody better than him,” said Rudy Giuliani last year about Langone’s prowess as a bundler for GOP politicians. And when he isn’t giving money and raising funds for the political friends of big business, Langone gives the invaluable gift of his careful insight, last year comparing progressives’ attention to income inequality to Hitler’s political project in 1933.
The only thing Langone had right was the year: 1933. It was in that year that President Franklin Roosevelt took office at the height of the Great Depression, inequality peaked to record levels, and fears of revolt circulated among that era’s fat-cat elite. Capitalism, unreined during the 1920s, had hit another of its cyclical failures, this time its worst yet. The powerful feared revolution, and the New Deal constituted a sort of bargain made between capitalists and the people: A bit of socialism to save capitalism from itself.
That year, John Maynard Keynes issued an open letter to the newly inaugurated Roosevelt in the New York Times, whose two opening sentences of the more than 2,500-word manifesto defined the stakes and posed revolution as the price of failure of severely altering capitalism as it was practiced. Keynes was no radical. He urged the new president to work “within the framework of the existing social system,” that is, to reform capitalism without allowing it to be abandoned or abolished.