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I've been watching in horror the story of Tom Perkins, wealthy co-founder of famous VC firm KPCB, who used a Hitler analogy to make a point about the demonization of the rich. I haven't yet seen a rational discussion of it in the media so I guess it's up to me.

For starters, using a Hitler analogy is almost always a self-refuting argument. And by that I mean that if you need to invoke a Hitler analogy, there's probably something deeply wrong with your point of view in the first place.

But I said "almost always." Interestingly, the Hitler analogy actually works in this particular case. My interpretation of Perkins' point is that the growing level of contempt for the rich is fueled by scapegoating. And if the economy falls into something like a depression, it is a legitimate concern that angry mobs might drag rich people out of their mansions and do harm under the theory that the rich are the problem.

What are the odds of that, you say? Low? Impossible?

I'd put the odds somewhere in the 5% range and growing. Remember, Perkins didn't say it will happen next Tuesday; he's simply identifying an emerging trend. Is it legitimate for Perkins to identify a potentially dangerous trend in its early stages with the hope of heading it off early? I'd say that's a legitimate position.

Keep in mind that Perkins got rich by identifying trends before others recognized them. His firm invested in AOL, Amazon.com, Citrix, Compaq, Electronic Arts, Genentech, Geron, Google, Intuit, Netscape, Sun, Symantic and more. So if you disagree with Perkins' assessment of the risk, please compare your success rate to his. And no fair saying VCs only get it right 10% of the time because in this case that would be often enough to totally justify raising the issue. And I don't believe anyone disagrees with Perkins' observation that the public's opinion of the top 1% is worsening.

Before delivering my verdict in this case, I'd like to state the facts as I see them.

1. I keep seeing comments and even headlines saying Perkins compared the suffering of the rich to the suffering of Jews during the Holocaust. As I have often written, all analogies invite wrong interpretations. I interpreted his analogy to mean that if the demonization of the rich continues there is a non-zero chance it could escalate into violence. That's far from saying rich people are exactly like Jews in concentration camps. The willful misinterpretation of his point (or perhaps confirmation bias) is strong evidence of his point. 

2. I often hear it said that the rich are torpedoing the U.S. economy by shipping jobs overseas or introducing robots. For starters, big corporations are owned by shareholders, most of whom are not rich. Second, the idea that the rich are, on average, subtracting jobs from the economy is economic illiteracy, not an opinion. That's the same sort of ignorance that drives most forms of discrimination and violence. 

3. If a pundit of modest means had raised a warning that worsening attitudes about the rich might someday escalate to violence no one would raise an eyebrow. The angry contempt shown to Perkins' opinion piece supports his opinion. Sure, the Nazi analogy was a bad choice, but does that make his point wrong? 

4. The fact that few citizens seem to care there is a chance that the rich might someday be dragged from their homes and killed is evidence of Perkins' point. The rich have already been dehumanized to the point where an offensive analogy seems the bigger crime against humanity than the possibility that the rich could someday be slaughtered by mobs. 

5. Much of the public believes the economy is a zero-sum game and therefore the rich are stealing their money from the poor. That is economic illiteracy, not opinion. It's the same sort of ignorance that made ordinary German citizens think the Holocaust might be a solution to their national problems. 

My verdict is that Perkins' point about escalating contempt for the rich potentially leading to violence is legitimate, in large part because the media contributes to economic illiteracy and highlights the bad apples in the top 1%.

The Nazi analogy wasn't politically correct. Nor was it a brilliant choice because all analogies cause fights, and when you throw in some Holocaust references you're just asking for trouble.

Is Perkins sort of a dick? Yes. But I have some respect for the fact that he's not trying to be a phony. And based on what I've read online, most of his critics are ignorant dicks. That seems one level worse than being a well-informed dick.

Yeah, I know, I'm a dick too. That goes without saying. Let's not get sidetracked.

 

 
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+1 Rank Up Rank Down
Feb 6, 2014
@ TomAnderson:
You mention INCOME inequality facts and then talk about WEALTH distribution. While it's not obvious at first glance, these are VERY different. (It's a common mistake. If you look up wealth distribution on Wikipedia, it's one of the first things explained).

A couple of examples: There are millionaires (in wealth) who are below the poverty line (not making/taking income). There are folks who cash out big in a single year, but had no other money.

Let's say you left an $80,000/yr job to start your own company. You plowed all of your life savings into the start-up, borrowed as much as you could from the bank, then family and friends, then maxed out your credit cards, etc. and after ten years of eating macaroni and living in debt you sold the company for $1 million. Congratulations, you're a 1%er! - for a year. Except that after paying debts, and interest, and especially considering what you put in for ten years, you'd have been better off staying at your old job.

Bazinga! This year's 1%er was last year's poor - and well might be below the poverty line again next year (in income) since he's again unemployed.

The truth is, the top 1% in income includes very few of the same people from year to year; it's made of up those who cashed-out, or otherwise had an exceptional year. If we have more entrepreneurs who tend to recognize concentrated payouts after many years of work, then income disparity will look bigger.

Warren Buffett is happy to see higher income taxes for "the rich" because they won't tax his wealth; only the incomes of those trying to get to where he is.
 
 
Feb 4, 2014
I'm sure I'm tail-end charlie to this discussion, but it seems to be the root of the problem is the division of wealth that leads to the "demonization of the rich". Being rich, Scott, you're not necessarily the best judge of this. But the Wikipedia article is pretty informative (and yes, everything on Wikipedia isn't correct. But check the references and sources yourself):

http://en.wikipedia.org/wiki/Income_inequality_in_the_United_States

"...By 2007, the top 1 percent account for 24% of all income.[29] In between, their share fell below 10% for three decades. In terms of the nation's wealth rather than income, as of 2011 the top 1 percent control 40 percent.[30]"

"A 2011 study by the CBO[14] found that the top earning 1 percent of households increased their income by about 275% after federal taxes and income transfers over a period between 1979 and 2007, compared to a gain of just under 40% for the 60 percent in the middle of America's income distribution."

The wealth distribution isn't a bell curve, it's a geometric one. That is your root issue. And that is a very real issue. And that can, and potentially should if it becomes inequal enough, lead to class conflict.

The phrase that comes to mind is that communism "guarantees" the outcome to be identical, where capitalism "guarantees" the opportunity to be equal. I don't think that's quite the case any more.
 
 
0 Rank Up Rank Down
Feb 4, 2014
> "5. Much of the public believes the economy is a zero-sum game and therefore the rich are stealing their money from the poor. That is economic illiteracy, not opinion."

Sorry Scott. If reading and reciting cliches is literacy, is literacy all that important?

Money is not stuff. A unit of Money is a token of (socially acknowledge) influence. It's sole value is in its ability to influence. If your Money has no social acknowledgement (ie. no one will be influenced by it), it has no value (except maybe decorative). It exists in the same space as language (though, of course, it's not identical).

Stuff may not be zero-sum, but Influence is constant-sum. If you have more, i have less. The distribution of Money is the distribution of Influence.

The ability of a group of people to create Money is the ability of a group of people to transfer influence to themselves at the cost of everyone else's influence. (Assuming everyone is locked in and there no other Moneys to transfer one's Money-influence to.)

Think of the distribution of Money as a field of influence that creates an economic/political dynamic. The greatest concentrations of Money have greatest influence in the shaping of the economic/political landscape. Those who can create Money shape the economic/political landscape ("democracy" is irrelevant).
 
 
Feb 3, 2014
So...if I say that the 99% are angry at me when I call them Hitler, then by getting angry at me about it is just proving my point.

Self-fulfilling prophecy much?
 
 
-2 Rank Up Rank Down
Feb 2, 2014


[Being rich is a circ-u-mstantial situation however, and can be easily cured through something called charity.
All one needs to do is give away one's money until one is no longer rich and they need no longer fear judgement of one sort or another. ]


Your Honor, the defense rests.

-----


I used them out of context for sure, but -
3 dead bankers; any death is sad (except Hitler's) but some of the article's comments also prove the point.

One can only hope this is a trend...
Keep jumping, you fsckers.
Mark Twain said it best: "I didn't attend the funeral, but I sent a nice letter saying I approved of it."
...can't say it's a bad start...
I think we can agree to not look too closely.
I hope its a copycat Dexter who's decided to focus on this group of people. Kind of like the Punisher
The kind of person that would consider assassinating bankers is more likely to claim public credit for it.
I would have been much less PC in the headline had I realized that banker hate was so strong.
I like to call this: A good start.
I don't feel bad for laughing at this.
Meh, Just a market correction nothing to see here.
On the one hand, it's bankers, these guys have not helped humanity, other than to line their own pockets.
If you ask me the stock market should be outlawed all together, it's ruined far many more lives than it has helped.

I rather love the idea that the rich will kill themselves before they endure the humiliation of not being rich. Saves us the trouble of doing it for them. Self-regulating economy, indeed!

--
Not Zero.
 
 
0 Rank Up Rank Down
Feb 2, 2014
I wonder if anyone would notice if Scott changed his subject line on a blog post more than a day after it initially appeared?

 
 
+2 Rank Up Rank Down
Feb 2, 2014
Well, here are a few fun facts:

1. Yes, (certain) media are accusing the 1% of killing the economy and the state because of their greed.

2. "Media" are reporting what most of the public wants to hear, as that is how they make their money.

3. Most of the public is feeling poor and ripped off (it really doesn't matter if that is really true - what matters is the public feels that way).

4. The biggest media are owned by some of the same people that belong to the richest 1%.

Conclusion:
The 1% are waging war among themselves (or far less likely - they are committing suicide).

Either way, my opinion is that since I have to work more for significantly less money to pay the bills since the crisis began (it really hit Croatia in 2010), I can't bring myself to care about those who have more than enough and still they try to avoid paying the taxes while the roads, bridges, hospitals and schools are falling apart.
 
 
Feb 2, 2014
Lol, you like to stir up some heat. Need some hits for your blog so that people see your book promotion? Just kidding, I know you don't need the money.

First of Perkins invited this. Whenever you invoke Hitler you will land on the wrong end.

Note that in Nazi Germany the government got violent against the Jews. That is one serious difference in the analogy, even if you distill it down to violence. If anything it should be compared to the Arab spring, where the population did rise against their perceived enemy even though the government and armies where not on their side (at least initially).

So the risk of having violence against the rich in America practically zero. America is a fortified democracy. There are only two parties, the Republicans and the Democrats. No extremist party has a chance to get into power. Both of these parties are being controlled by money (see what the last two governments did to enrich the gamblers in the finance industry, winnings are private, losses are being socialized). You could argue that the Tea Party is an extremist organization within the Republican party. Interesting enough there is quite some power struggle within there, the Tea Party is being propped up by big money (Koch brothers) but does not always follow the interest of big money (making the US declaring bankruptcy is not really in the interest of big money). Nonetheless, the Tea Party is definitely not against the rich, if anything they are against the poor, who just take away my hard earned money. Interesting enough this is a interesting comparison, the Nazis were also supported by big money (German (e.g. Krupp) and US industrialists (e.g. the Bush family)).

With the government on the side of the 1% there is almost no danger for the rich of being the target of violence. Heck, even something like the RAF in Germany's 70s (a terrorist group which targeted rich industrialists) is much more difficult nowadays with the police state implementation in most countries.

I agree that the MSM is making people illiterate. But this is something the 1% actually want, so they have to blame themselves for it.

And of course the rich are being penalized for being rich and their taxes are way to high and must be lowered.
Some facts:
http://en.wikipedia.org/wiki/File:US_Effective_Corporate_Tax_Rate_1947-2011_v2.jpg
http://en.wikipedia.org/wiki/File:Historical_Mariginal_Tax_Rate_for_Highest_and_Lowest_Income_Earners.jpg

Note that the tax rate was only once lower, that was around the great depression which led to WW II. So there is something for a controversial analogy. Low taxes and politics which favor the rich lead to world wars.

 
 
-3 Rank Up Rank Down
Feb 2, 2014
You were right, I was wrong. Successful people will not be dragged out of their homes by angry mobs.
(They will be kidnapped, assassinated and their deaths will be made to look like accidents and suicides)

"Bloomberg is reporting this morning that former Federal Reserve economist Mike Dueker was found dead in an apparent suicide near Tacoma, Washington.

"Dueker, 50, a chief economist at Russell Investments, had been missing since Jan. 29 and was reportedly having troubles at work.

"Normally HousingWire wouldn’t cover deaths in the industry, but what’s strange is that Dueker is the third prominent banker found dead since Sunday.

More free pizza and cheese bread to the masses!

 
 
Feb 2, 2014
His analogy is incorrect because in the eyes of the Nazis (and their supporters) the Jews were born evil and could only be cured by death. Being rich is a circ-u-mstantial situation however, and can be easily cured through something called charity.

All one needs to do is give away one's money until one is no longer rich and they need no longer fear judgement of one sort or another.

Christianity and Marxism are both in solid agreement about the sordid qualities of the rich, so I don't see why you and your fellows find it so surprising that the rich in general are not more popular.

I would love to discuss this further in a debate with you Scott, whenever you want.
 
 
+6 Rank Up Rank Down
Feb 2, 2014
Poverty, disease, hunger, illiteracy, housing, premature death, clean water, cheap energy, ease of labor, transportation...

Capitalism and a government that supports capitalism has been the foundational reason all of these are better today than in the past. (Having a few natural resources didn't hurt.)

When you demonize success, you are eating your seed grain.

Our government must not interfere with an individual's right to:
Life, Liberty, and the Pursuit of Happiness. (pursuit of property)



Unfortunate analogy, yes. But arguing about that, instead of discussing what is success and how to achieve it, is another lost opportunity.
 
 
Feb 2, 2014
Just a thought. Since the consolidation of massive economic power into a few hands mirrors what happened in the Soviet Union, is it logical and fair to casually equate America's super-super rich with enemies of democracy and capitalism?

"Tom Perkins compares opposition to a Soviet-style economy to terrorism."
 
 
-1 Rank Up Rank Down
Feb 2, 2014
Scott,

Darn... by the time I write the comment, the log-in times out and the page asks me to log in again. The comment disappears.

So no point in wasting time to think and comment.

This one is off-the-cuff, typing at lightening speed...

====

Scott,

This news about Perkin's Hitler made to the front page in India.

My take is:

The entire educated world knows that the US media is run by lobyyists. If you discount that from the hope of influencing the disruptive activists to refrain from violence, then there is nothing left for the politicians and venture capitalists to rely on.

I think this is not a simple tradition conflict between rich and the poor, or a idiot-proof versions of Ayn Rand's "Age of Envy".

To me, this appears like a handful of multinational corporates at war.

Hope I am wrong.

.
 
 
Feb 1, 2014
Hyperbolic statements are generally not worth arguing against.

Referring to Hitler is the prime example.

Others are:
"Meat is murder!"
"Meat tastes nice!"
"This is not an opinion, it's fact."

While all of them can be true in a given instance, using them is always a way to dissuade any attempts to attack that part of the argument.
Basically to invalidate any attempt to attack the premises, which is always where good logical attacks occur.

I believe what you are saying in this instance is:
"Assume common economic theory is correct, otherwhise this post is meaningless, and I don't want to discuss that premiss".

However, this leads to the awkward result of not being able to argue the merits of the premises, meaning you can only argue about the conclusion.


As for the main point of the post.
Yes, people tend to dislike those with better options available to them, this is a basic human instinct which exists in most intelligent animals. Best example I've seen is a video where monkeys accept pieces of a cucumber as a reward for an action, unless other monkeys receive a grape for the same action. If this occurs, the monkey will refuse to eat the cucumber, since it "deserves" a grape.
Basically, it's the instinct of fairness, which of course is crap since life isn't fair.

This leads to a certain conclusion that the greater the perceived injustice, the more instinctual the response will be instead of rational.

This seems to be the basis of your assumption as to why some people hate the rich people, and it's certainly true.

It would be interesting at some point to try to explain why I consider "Rich people=good for the economy(=and inferred good for the people)" to be an absurd statement, but, as I said, you seemed to put this as a premise which cannot be assailed.
Which makes it not really worth my effort.
 
 
+1 Rank Up Rank Down
Feb 1, 2014

What are the odds a mob would attack a wealthy person. "Dragging them from their home."


Taking my property is the equivalent of taking hours from my life. I had to work another 3 1/2 hours to replace the gas can you stole from the back of my truck.

--

Stores and homes were targeted by mobs after Hurricane Sandy:

"Bout to do some looting when this hurricane finally hits….gonna get a new laptop and tv…this hurricane might be the best thing to happen.

"If this hurricane gets real bad I'm looting stores ! i always wanted to do that."

"I'm gonna go looting once this hurricane hits Utica."

"Has #HurricaneSandy made landfall yet? My !$%*! ass is ready to go looting!"

"helllll yeah I'm gonna go looting after the storm hits."

"Who wants to go looting with me when Sandy hits?! I need some new !$%*!$



Stores and homes are targeted by mobs after power outages.

Stores and homes are targeted by mobs after perceived insults and unpopular verdicts.


--

I have to hope this is only one crazy person:

...Friends, ... the thought occurred to me that, in a world where more than a billion people are starving, being rich, I mean really rich, is perhaps a crime against humanity...

...Surely for a few to have so much and for so many to have so little is wrong. In fact, it could be seen as an obscenity.

Friends, perhaps the only way to change this grossly unfair situation is to make being rich a crime against humanity. Perhaps we have to drive the moneychangers from the temple, destroy the view that the ultra-rich are icons, that they are to be envied. Perhaps we have to make being rich an obscenity and target those who are and change the system that allows them to proliferate and prosper.

Perhaps we should pelt their luxury cars with stones, trash their mansions, protest whenever they appear in public, refuse to doff our caps to them, treat them as the parasites that they are.

Perhaps they should also be taxed out of existence and the money used to right some of the terrible inequalities that exist in the world and reverse some of the environmental damage that the rich have caused.


... Surely then, being ultra-rich IS a crime against humanity!

[And there are many supportive comments to this post]

--

What are the odds a mob would attack a wealthy person. "Dragging them from their home." Not Zero.

*It was a nice gas can.
 
 
Feb 1, 2014
@julesmartman

I think theres one-perhaps more than one-reader who down votes everything I post.
 
 
Feb 1, 2014
@whtllnew
Thanks, now I can stop trying different soundings to figure it out. I probably appeared like some crazy dude talking to himself. :-)
But now I wonder why there is a negative vote on your post? Is there actually somebody disappointed? Possibly because you've removed the mystery? Funny internet people.
 
 
Feb 1, 2014
MTBob,
We are not talking about Warren and Bill, who actually maintain a fairly positive public image, wealth and all. We are taking about the millions of Rich, particularly in the financial industry who have people like Perkins as their spokesman whether they like it or not.
These rich have done little recently to fight the perception that they are anything but leeches on the capitalist system, exploring weaknesses in the stern to siphon off wealth from not only the masses, but also the honest small businessmen who embody capitalism at it's best. It is the Ebenezer Scrooge image of a ruthless rentier who is both cruel and a miser. Scrooge cared nothing for wealth, only money, and made the world worse for it.
 
 
Feb 1, 2014
Scott's analysis is spot on.
Occupy Oakland Nov 2011 may not have been the equivalent of Kristallnacht, but it was definitely anti-business/1%. It sure looked like the demonstrations in Germany that preceded Kristallnacht. We are certainly moving in that direction, and most of the media seems to be all for it.
 
 
Feb 1, 2014
@MTBob

[What power does Bill Gates and Warren Buffet have over you, that isn't far outweighed by the choices you make yourself?

Do you think Bill and Buffet have not changed your life for the better, more than you have changed theirs?]

I think Warren's net is near even, due to his indirect interference with pipeline construction to keep the oil on his trains.

Bill and Melinda, on the other hand, are doing more good for humanity now than he ever did via Microsoft. Bill will turn out to be one of the rich historical figures that made a real difference for the better, worldwide. Bill will be in the kid's history text books. Warren, not so much.
 
 
 
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