Financiers Stanley Druckenmiller, Pete Peterson and John Arnold form a trifecta of treachery.
October 24, 2013 | Ideas are costly, especially bogus ones. And a growing class of billionaires is more than willing to pay.
Whether they’re ginning up deficit hysteria to cut Social Security or blaming teachers and firefighters for state budget crises, these 1 percenters pose as defenders of your interests while arranging things so that they can plunder America and leave hard-working people with scraps. They fully understand mechanisms of manipulating public opinion, and they can pay off pundits and politicians to subscribe to whatever ideas best justify their greed and abuse.
It’s not enough that we now have the widest divide between rich and poor in living memory. These men are determined to crack open that gulf even wider.
We bring you profiles of three financiers who never made a useful thing in their lives, including one who helped bring you the Enron disaster. They are united in their efforts to blame ordinary people for Wall Street-driven economic woes and carve out another pound of your flesh for the rich. Money is no object in their quest.
Here’s a look at how these three made their money, how they’re conning the public, and what they don’t want you to know.
1. Stanley Druckenmiller
His stash: $2.9 billion, made from hedge funds.
His con: Turn young people against seniors by scapegoating Social Security and Medicare.
Stanley Druckenmiller is the most insidious kind of capitalist charlatan—a rapacious wolf of an oligarch hiding in sheep’s clothing. “I just want what’s best for young people!” he cries. But his fangs are so long and sharp that only a fool could overlook them.
Druckenmiller, long a funder of right-wing causes and politicians, has lately been popping up on college campuses promoting economic nonsense in an effort to convince young people that greedy grandparents are to blame for America’s weak economy. Yep, that’s right. He sells the notion that instead of student debt, shitty jobs with few protections, and the hangover from a Wall Street-driven financial crisis, Social Security is what’s hurting today’s youth. Seriously.
Druckenmiller tarts himself up as a generational and class warrior who wants to save young people from their elders by slashing the social insurance programs that keep them out of poverty. Never mind that these young people will one day reach an age where they will need these programs even more than the current generation of retirees because they will likely have no pensions and will have saved into disastrous 401(k) plans—that is, when they can actually find jobs that have any kind of retirement plan at all.
Druckenmiller plays on the psychological tendencies of young people to get pissed off at older folks. He manipulates that habit in order to deflect blame from those who are actually hampering and destabilizing the economy, such as greedy financiers like himself. He cleverly tosses in enough populist-sounding tidbits, like raising taxes on capital gains, to pretend that he’s really on the side of the regular folks.
Which is bullshit.
The truth is that we ought to be expanding the social safety net because we’ve got a retirement train wreck coming and a political system that’s transferring wealth from working people to the rich. Taking money out of the pockets of seniors actually stalls economic growth by decreasing the demand for goods and services, as anyone who has taken Econ 101 is aware. Programs like Social Security actually save America money because they are inexpensive to run, and unlike private plans, don’t gouge citizens with high fees. By the standards of advanced countries, our programs are pretty paltry to begin with, and cuts bring us closer to the Dickensian world that is no doubt what greed-blossoms like Druckenmiller dream about at night.
Despite the destructive stupidity of his ideas, Druckenmiller knows how to get the media to carry his poison. His nonsense was recently championed by Tom Friedman in the New York Times and James Freeman in the Wall Street Journal.
As Robert Kuttner has recently explained, it takes a lot of freaking nerve for an oligarch to argue that the “income distribution problem is somehow generational and that he, as a billionaire, has anything whatever in common with most college students or most recipients of Social Security.”
Druckenmiller has that nerve, and then some. Where are the pitchforks?
2. Peter G. Peterson
His stash: $1.5 billion, made from private equity.
His con: Stoke deficit hysteria in order to shrink the government and let the wild horses of capitalism trample the masses.
Pete Peterson is the ultimate phony patriot. He has served as commerce secretary under President Richard Nixon, made billions on Wall Street buying companies in order to loot them, and has been tireless in his campaign to blame all of America’s ills on a federal budget deficit — you know, the one that is actually declining. Through his Peter G. Peterson Foundation, this elder statesman of the oligarchy has spent about a billion dollars of his own stash to get us to buy the idea that America is broke, despite the fact that it is the richest country in the world. And guess who must open their wallet? You!
There is nothing Peterson will not buy to further his agenda: school curricula, think tanks across the political spectrum, seminars, TV ads, politicians—hell, he even bought his own newspaper, the Fiscal Times, where propagandists calling themselves reporters spread his deficit hysteria and promote Peterson’s fondest wish, which is to kill Social Security and Medicare.
Though the public repeatedly rejects his nonsense, Peterson is able to pay influential politicians to sing his tune, including Erskine Bowles and Alan Simpson, who have been trotting out their discredited reports on the deficit ever since Obama appointed them to his fiscal commission in 2010.
Peterson is the oligarch behind the “Fix the Debt” campaign, a consortium of corporate honchos and wealthy individuals who have made it their mission to bring deficit scare-mongering to D.C. in order to achieve cuts to essential programs and secretly push through their main goal, which is lowering taxes on the wealthy.
Over and over, Peterson & Co. will try to gin up artificial crises so they can force Congress to do their bidding. Whenever you hear the phrase “grand bargain,” somewhere out there a Peterson crony is smacking his chops. And the tasty treat is your pocketbook.
3. John Arnold
His stash: $2.8 billion, courtesy of Enron.
His con: Enrich Wall Street by blaming state budget crises on teachers, firefighters and other public workers.
If you were writing a movie script about unbridled capitalism, you could do no better than John Arnold as your villain.
Young, clean-cut and soft-spoken, Arnold looks like he just wants what’s best for America. But that would be his America, not yours.
For starters, Arnold made his fortune at Enron, where he worked with a gang of criminal fraudsters to wreck, among other things, California’s economy. Now he is actually using a front group to loot California’s pension system.
The 39-year-old Arnold left his work as an energy trader in 2012 to style himself as a new breed of philanthropist who will change the course of history—in favor of the 1 percent.
As David Sirota and Matt Taibbi have explained, Arnold’s game is promoting a “pension reform” movement designed to channel billions of dollars in public pensions to hedge funds and Wall Street players who can charge exorbitant fees while mismanaging public money and hiding their shenanigans from the citizenry.
Arnold disguises his agenda by doing things like donating to the federal Head Start program—purportedly to help it through the government shutdown.
But don’t be fooled. He’s been very busy behind the scenes with other activities. He joined forces with Pew Charitable Trusts to create a campaign to cut pensions and he has tirelessly spewed impressive-sounding actuarial nonsense at elected officials and members of the media to get governments to transfer wealth from public workers to Wall Street. Gina Raimondo, the Rhode Island state treasurer, is an Arnold-acolyte and has allowed the state’s pensions to fall victim to a Wall Street coup that will let financiers to fatten their wallets at the expense of people whose only crime was to get up in the morning and go to work serving their communities.
The reasons state and municipal budgets are having troubles has little to do with the fact that teachers and other workers will end up with pensions that average around $25,000 a year (and many of them won’t get Social Security). They are hurting because Wall Street has been ripping them off for decades, and then socked them with a horrific financial crisis which killed revenue streams. That plus the plague of unscrupulous politicians who have been shoveling money meant for pensions into their pet projects is why states are suffering and pensions are dealing with shortfalls — though usually not the hysterical crises Arnold and his cohorts would have you believe. Robbing teachers and firefighters will not solve these problems. Reining in financial criminals and crooked politicians will.
Enron’s collapse already wiped out 401(k) plans and gutted pension benefits that many workers counted on for retirement. But somehow that blow to society did not satisfy Arnold. He’d like to bring more retirement disasters to a neighborhood near you.