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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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Jan 30, 2014
@whttlnew,

You need to pay more attention to his blogs. Go back and read his manifesto when he was 'running' for president. He only 'endorsed' Romney because he was pissed at Obama's stand on enforcing federal marijuana laws, which he (Obama) has since changed his opinion on. Not that it made any difference, because Scott doesn't vote.

Overall, he's a California liberal, although he says he's more libertarian. I don't think so.
 
 
Jan 30, 2014
Scott, you seem to have a very different view of rich than the rest of us.

You wrote: "big corporations are owned by shareholders, most of whom are not rich"

Show me any poor person that owns stock, that they bought while they were poor.
 
 
+7 Rank Up Rank Down
Jan 30, 2014
History provides loads of examples of the rich becoming so abundantly wealthy with respect to the other classes (not necessarily the poor) to arouse violent reactions. Those examples would be historically correct, but in general they would not generate sympathy for the cause of the rich.

Quite likely, this guy chose the Hitler example just because he was trying to get sympathy for his own cause and the Shoah is handy when someone tries to do that. He just had no idea of the reactions he would provoke.

Incidentally, this is often a clear sign of disconnection from common sense.
 
 
+2 Rank Up Rank Down
Jan 30, 2014
@AtlantaDude

The other side of that coin is that the fall of the USSR and collapse of communism meant that capitalism didn't need to compete anymore. When communism was around, capitalism had to be tempered and regulated to ensure it worked for the masses or else people might try communism instead.

Communism didn't emerge from nowhere. It came due to the inequality caused by unchecked capitalism. You may notice capitalism worked really well for everyone when there was a communist opponent and began its current trend towards inequality and dynasties right as it became clear that communism was failing.
 
 
+16 Rank Up Rank Down
Jan 30, 2014
@PhantomII

[OOOH, boy. You just got kicked out of the liberal club. And it's snowing in Hell again.]

You mean he wasnt kicked out when he endorsed Romney? Or one of those times the feminists flamed him? Or when he posted that Success Pie blog? Or the Joiners Dilemna blog?
 
 
Jan 30, 2014
This one has me flummoxed. The word in my post that got caught by the blog's dirty-word defender was, "w r i s t w a t c h." I can see it catching 'e n t i t i e s' because of the word made by the third, fourth and fifth letters, and maybe even 'S h e l l y' (Scott's wife's name) because of the word made from letters two through five, . . . Oh, wait a minute. I just figured it out.

Oh, man, this is a good one. It censored me because of the slang word made from letters five through eight of that word. Un-effing-believable! I guess from now on, I'll just use the German word "armbanduhr." More germane to this discussion topic anyway, I guess.
 
 
Jan 30, 2014
If Perkins is so good at predicting the future, why didn't he predict that his comments, whether logically sound or not, would further inflame opinions against the rich. His comments may have actually raised the chance that angry mobs attack the rich from 5% to 6%.

Based on his lack of foresight when he made his comments, I'm going to say that he's good at picking investments, but not so good at predicting social trends.
 
 
Jan 30, 2014
The unintended consequence of the fall of the Soviet Union has been that we no longer have a glaring counterexample to demonstrate that when you demonize the rich and take away all their money, it doesn't solve anything in the short term, and makes things worse in the long term. Sure, there is Cuba, but it hardly captures the national attention like the USSR.

Without that glaring example, we have 20 years worth of Americans who have come of age with nothing to counterbalance their emotional desire for "fairness". Add in a left-leaning president and it is like throwing gas on a fire.

Reagan & Thatcher believed that the socialist urge was buried in the ash heap of history, but it turns out it was just in a prolonged hibernation. So, America's best hope is probably for a big country like France to go into full-communist mode (and perhaps drag their own rich people into the street), so the youngsters in the U.S. can watch that envy-driven belief system fail yet again.

 
 
Jan 30, 2014
OOOH, boy. You just got kicked out of the liberal club. And it's snowing in Hell again.

I googled this term: "Tom Perkins Hitler." Here's what came up, in order:

"Why do the rich keep comparing Obama to Hitler?" - The Atlantic [I don't think Mr. Perkins said anything about President Obama]

"Tom Perkins' unhinged Nazi rant" - Bloomberg

"Rich Idiot warns of Progressive Kristallnacht" - State Magazine (blog)

"Daily Kos: Cartoon - Tom Perkins is the Hitler of making accurate comparisons" - www.dailykos.com (obviously)

"Tom Perkins is wrong - Germany's 1 Percent were Hitler's Allies. . ." - www.politicususa.com

Scott said that he hasn't seen a rational discussion of Mr. Perkins' statements in the media. He is being much too kind. The irony here is that their reaction, to some extent, makes Perkins' point.

I was trying to find out exactly what Perkins said in his letter to the editor of the Wall Street Journal. You pretty much can't, or at least I have not been able to find a complete text of what he wrote. But we do know in general, based on the vitriolic reaction he's received from the press.

One thing that seems to stand out in the reaction to Perkin's opinion: the rich should never defend themselves. They should simply roll over and allow themselves to be demonized. When the Occupy San Francisco thugs broke bank and car dealership windows while the police stood by doing nothing, no rich person should have been allowed to bring up Kristallnacht. When howling Occupy-movement protestors camped out on the lawn of bank executives, trampling their gardens and screaming threats at them to the point where they were afraid to leave their houses, then those rich SOBs should just stand there, take it and look guilty.

They should never protest. They should never point out that it's not OK for someone to seize their property just because they didn't, as the Nazis did to the Jews, take away ALL of their property. They should never, as Tom Perkins did, mention that excessive taxation and regulations are hurting the economy, destroying jobs and increasing poverty.

And God forbid that anyone say that progressive 'redistribute the wealth' policies don't work. That is blasphemy! The ONLY way to make the poor richer is to make the rich poorer!!!!

As Scott said, that zero-sum view of economics is based on ignorance. Yet how many politicians do you know that repeat it as gospel?

It's an easy cop-out to blame someone else for your situation. Hitler blamed the Jews. Progressives blame the rich. Both used it as an excuse to take some or all of the demonized group's property away from them.

Does it just come down to a matter of degree? Is it OK to steal from the rich as long as you leave them a little of what they've earned? Is it helpful to people in the long term to make them dependent on government for their livelihood?

Should we consider it a success or a failure that there are more than 47 million people on food stamps, or that working-age Americans now make up the majority of food stamp recipients? Does anyone but the rich bear responsibility for our $17 trillion debt? Is it the rich's fault that the labor participation rate is at its lowest point since 1978?

Scott correctly points out that the virtual lack of discussion of Perkins' point is troubling. Most of the articles I've read seem to center on how rich he is, and how much his !$%*!$%*!$ costs, rather than discuss his allegations.

Perkins was trying to say, albeit not adroitly, that scapegoating is never a good thing. It is an essential precursor to increasing the power, and the capability to oppress minorities, of a strong centralized government. Just because the minority in question has more money than you do does not make it right.

 
 
+3 Rank Up Rank Down
Jan 30, 2014
Scott, you're not a dick. But you seem to take for granted that the wealthy are being demonized. The wealthy are simply not being demonized (at least not in any real way, I'm sure a few people hate them). Only morons writing conservative blogs and the idiots at Fox think anyone is demonizing the rich - they are in the "stir up emotion with truthiness for page views" business. Please, for the love of all that is good and holy, stop perpetuating this myth. Occupy Wall Street was about the rich being given excessive privilege in relation to the privileges given the "other 99%". And it is arguable that those that have achieved the American Dream have a moral obligation to give what they can to help others achieve it (recent polls suggest that the poor give more to charity as a percent than the rich). Somehow too many people have come to think that the goal of life is the accumulation of wealth. Not happiness, not health, not comfort, not family and friends, not service - the raw accumulation of wealth. And by creating this mythological persecution complex, folks like Perkins fool us into thinking that we have to fight to keep our wealth, as if that was a worthy goal.
 
 
Jan 30, 2014
>I haven't yet seen a rational discussion of it in the media so I guess it's up to me.

Scott, what is especially rational about this post? Are you really making this argument or just trying to create a !$%*!$%*!$ For the fun of it? Whichever, I'll bite. It's getting late here and I'm in the appropriate mood.

>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.

OK, I live in the UK, but I haven't seen any news stories that any billionaires are being dragged from their homes. I saw a story today about the Google buses protest. How does that translate into a "legitimate concern" about bodily harm?

> I'd put the odds somewhere in the 5% range and growing.

On what evidence?

>Keep in mind that Perkins got rich by identifying trends before others recognized them.

Being good in one thing, doesn't make someone infallible. This argument is specious. And I recall someone writing about declining opinions of experts.


>a potentially dangerous trend

What trend are you talking about? Let's have some datapoints.

>And I don't believe anyone disagrees with Perkins' observation that the public's opinion of the top 1% is worsening.

That's probably true, but that still doesn't mean that billionaires are about to be strung up. Are their feelings being hurt?

>The willful misinterpretation of his point (or perhaps confirmation bias) is strong evidence of his point.

I think I read somewhere that "all analogies invite wrong interpretations".

Perkins wrote:

> Kristallnacht was unthinkable in 1930; is its descendant "progressive" radicalism unthinkable now?

This is pretty meaningless. WTF is "progressive radicalism", anyway? What is this comparison supposed to mean? People hate billionaires like the Nazis hated Jews? The comparison is emotive and completely unnecessary, which I admit you concede.

>For starters, big corporations are owned by shareholders, most of whom are not rich.

What has this point to do with anything?

>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.

You haven't introduced any evidence to support this perspective. It only seems to be rich people complaining that they have been dehumanised. Again, I ask, are their feelings being hurt? Boo hoo!

>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?

As far as I can see Perkins is being melodramatic comparing some bad press about rich people to an event where Jews were killed and imprisoned and their homes and businesses destroyed. Holding up a staff bus does not compare, nor does it consitute grounds for asserting that serious violence will follow.

>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.

Evidence? There is a non-zero chance that you or I will be killed by a meteorite tomorrow. I imagine few people care about this either.

>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%.

Based upon whose assessment? You've offered no evidence to support this position other than. vague conjecture and unsupported statements.

Regards,

Roger
 
 
Jan 30, 2014
I found this to be a really good summary of what it means to be middle class...

"By security, I mean that you have enough resources and backup that the ordinary emergencies of life won’t plunge you into the abyss. This means having decent health insurance, reasonably stable employment, and enough financial assets that having to replace your car or your boiler isn’t a crisis.

By opportunity I mainly mean being able to get your children a good education and access to job prospects, not feeling that doors are shut because you just can’t afford to do the right thing."

(http://tinyurl.com/m995u3u).

When security and opportunity are only available to a very few very rich people then violence will ensue. But we're a long way from there and the NAZI analogy as they always are was tacky.
 
 
+5 Rank Up Rank Down
Jan 30, 2014
whtllnew mentioned the point I had made previously, that every group is expected to check the worst excesses of their peers. The rich haven't done that at all. After the Great Depression, you had wealthy FDR coming out and restarting capitalism with a level playing field and it worked. After the savings and loans scandal, you had over a thousand bankers put in jail.

This time? Nothing. No jail time, no infrastructure program to put wealth back into the hands of workers to restart capitalism. All the US has done is buy the badly-thought out mortgages off the banks who screwed up, allowing them to give themselves more bonuses. This cash infusion has also propped up the stock-market despite there being no recovery at the ground level for lower-wage workers.

It seems the reason decent wealthy people don't complain about the democracy-corrupting actions of evil wealthy people is because they benefit. Bush's tax cuts for the rich? No complaints from wealthy people. Trade deals that push down wages and dilute democracy but benefit wealthy executives and investors? No complaints from wealthy people. Only Buffet ever says anything about this intentional war on the non-rich. Now you have 85 people with the same wealth as half the world's population and capitalism is slowly self-destructing due to lack of consumer spending power.

So anyway, his comparison to the Jews and Nazis only works if the economic troubles affecting Germany were actually the fault of some of the Jews. Because the economic troubles affecting everyone now are the fault of some of the rich. And the rest of the rich need to stop them because no one else can.
 
 
+1 Rank Up Rank Down
Jan 30, 2014
Campaign dollars are becoming a poor predictor for vote totals. The money that the wealthy put into buying politicians is getting less and less of a return. Eventually, if income inequality isn't checked, someone could ride a popular wave of support on a campaign to nationalize corporations and redistribute wealth.

Since the rich do still control what happens in government, maybe they should stop pushing policies to fatten their bottom lines and cut the safety net. Better to work with someone like Obama than be crushed by someone like Chavez.

I don't think there's really much chance that the rich are ever going to be dragged from their homes by mobs of poor people, but I won't completely discount the possibility. There's a lot of anger not just because the rich are rich, but because of those who wrecked the economy through fraud and conspiracy, and never had to face the music. If the DoJ continues to coddle Wall Street, I can imagine mob justice one day coming to bear. Likely, no. Possible, yes.
 
 
Jan 30, 2014
@jakesdad

Crowdsourcing has not yet royally fracked up but that doesnt mean it wont. I beleive it will if we give it a chance.
 
 
Jan 30, 2014
Scott, off topic but since you've blogged before about the internet evolving government away from the monolithic/hierarchical model I was wondering if you've been following our little situation down here in Atlanta. short version: government ROYALY fraked up but in the midst of the apocalypse crowdsourcing took over. I'm sure there were more than one but the one that seemed to bubble to the top was https://www.facebook.com/groups/snowedoutatlanta/

seems like a pretty good case study in your vision - thoughts?
 
 
Jan 30, 2014
What are you hoping for here Scott? For folks to stick up for the rich? Good luck with that. Seriously. While I beleive the rich are out of touch and need a greater appreciation of what the not rich go through I also beleive that making the rich afraid of everyone else is counter-productive. Let the rich get it into their heads that the not rich are their enemies and they wont even have the ignorant concern they have now.

But I also think we will have to resign ourselves to this sort of demonization for some time. As someone else commented not too long ago just as we want moderate blacks and moderate muslims to rein in their more extreme elememts we also want the good rich to do something about the bad rich. More than that, we NEED the good rich to do something about the bad rich because the rest of us cant. The press has put out plenty of stories about how the Great Recession was caused by the bad rich and how they got away with it. How accurate that is is irrelevant; the point is until the Great Recession is truly over people wont be ready to start 'forgiving' the rich and wont be ready to listen to anyone standing up for them.
 
 
+17 Rank Up Rank Down
Jan 30, 2014
Brave man, Scott. I wouldn't touch this topic with a 10 foot pole. I hope you put on your armored underpants.
 
 
Jan 30, 2014
I believe he said he thought of the analogy while witnessing unchecked vandalism during the Occupy Wall Street demonstrations. That's legitimate and he was simply being honest so i see no reason for him to apologize for it other than making a statement that a majority are too uneducated to fully understand.

There's no doubt the chances are increasing, and i would love (honestly) to stay non-political, but our president who is charged with upholding the laws of this country has made a point to ignore enforcing laws he does not agree with, sending a clear signal that not the rule of law but sanctioned mob rule is the law.
 
 
+1 Rank Up Rank Down
Jan 30, 2014
I see the escalating contempt for the rich as being fomented from the top...the President and his minions, and seconded by sycophantic media.

I agree that any analogy is problematic with Hitler/Holocaust analogies especially so, and that economic illiteracy abounds.
 
 
 
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