The Purpose of Spectacular Wealth, According to a Spectacularly Wealthy Guy

[cbayer]

http://www.nytimes.com/2012/05/06/magazine/romneys-former-bain-partner-makes-a-case-for-inequality.html?_r=1&emc=eta1



By ADAM DAVIDSON
Published: May 1, 2012

Ever since the financial crisis started, we’ve heard plenty from the 1 percent. We’ve heard them giving defensive testimony in Congressional hearings or issuing anodyne statements flanked by lawyers and image consultants. They typically repeat platitudes about investment, risk-taking and job creation with the veiled contempt that the nation doesn’t understand their contribution. You get the sense that they’re afraid to say what they really believe. What do the superrich say when the cameras aren’t there?


With that in mind, I recently met Edward Conard on 57th Street and Madison Avenue, just outside his office at Bain Capital, the private-equity firm he helped build into a multibillion-dollar business by buying, fixing up and selling off companies at a profit. Conard, who retired a few years ago at 51, is not merely a member of the 1 percent. He’s a member of the 0.1 percent. His wealth is most likely in the hundreds of millions; he lives in an Upper East Side town house just off Fifth Avenue; and he is one of the largest donors to his old boss and friend, Mitt Romney.

Unlike his former colleagues, Conard wants to have an open conversation about wealth. He has spent the last four years writing a book that he hopes will forever change the way we view the superrich’s role in our society. “Unintended Consequences: Why Everything You’ve Been Told About the Economy Is Wrong,” to be published in hardcover next month by Portfolio, aggressively argues that the enormous and growing income inequality in the United States is not a sign that the system is rigged. On the contrary, Conard writes, it is a sign that our economy is working. And if we had a little more of it, then everyone, particularly the 99 percent, would be better off. This could be the most hated book of the year.

Conard understands that many believe that the U.S. economy currently serves the rich at the expense of everyone else. He contends that this is largely because most Americans don’t know how the economy really works — that the superrich spend only a small portion of their wealth on personal comforts; most of their money is invested in productive businesses that make life better for everyone. “Most citizens are consumers, not investors,” he told me during one of our long, occasionally contentious conversations. “They don’t recognize the benefits to consumers that come from investment.”


more at link

[JHB]

1. Complete, self-serving claptrap (Conard)

[Old and In the Way]

2. Problem for Conrad is...

if US consumers have no money to consume, investors have no motivation to invest here. The problem isn't with the traditional idea of consumers/investors. The problem is that the investors, through taxbreaks and outsourcing, have drained the consumer class here. The financial pump that made this country work is reaching the bottom of the barrel and it's pumping hot air instead of wealth creation. The trillion dollar Bush taxcuts are a perfect example. The money saved from these taxes wasn't invested in our economy...it was invested in places like China where capital was needed for growing that economy. Capital goes where capital grows...and it hasn't been growing here for over a decade.

[JHB]

4. He's an acolyte of the Divine Right of Market...

...The Market will make this the best of all possible worlds, because (insert number-laden but ultimately unsupported assumptions). Therefore, any interference in The Market makes just hurts everyone. QED

The idea that there is a tension between circulation of money and maximizing profit seems to escape him. But he's rich, and doing things his way would make him even richer, so who cares.

It's not as if he noticed that he's lumped in the same scientists and engineers that created his examples of investment-creating-wealth with his sneer of "art history majors".

[unblock]

8. exactly right! the right-wing "free" market view is very panglossian

there's zero discussion of whether or not they're getting an unfair rent, an unfair share of whatever "improvements" they're making to the economy, or whether on the whole they're not even making the economy better at all, just steering more of the wealth into their own pockets.

just because it makes money does not mean it's good. even in capitalist theory, that only works if certain rules are adhered to, and private enterprise always works hard to undermine those rules and their enforcement.

[bemildred]

3. Sounds like the same old circular arguments to me.

Rule by the rich is good because if you were rich you could buy an iPod.

[phantom power]

10. +oo, it's just more shamelessly recycled "job creators" and "trickle down" rhetoric

Waaaaah, leave the 1% alooooooooooooone!!

[The Magistrate]

5. This Is The Kind Of Thing, Ma'am, Makes Me Want To Pick Up A Shotgun

[yurbud]

6. companies like Bain are to investing like a chop shop is to a car factory

guys like him could not produce a real product or service if their lives depended on it.

[Old and In the Way]

7. Excellent analogy!

Vulture capitalism is very much a chop shop operation. The value of the parts is greater than the product itself. If one were to buy individual parts to produce a car, the sticker price would indeed be shocking.

[JHB]

9. For a guy who thinks the problem is an unwillingness to take risks...

...how many of the companies he has investments in have limited liability?

If he likes risk, then let him risk. If one of his ventures goes bad big enough, let him lose every single thing he has. No firewalls, no hedges, just win or lose, baby.

How risky will you be if you have to face that?

[limpyhobbler]

11. Yep so-called free market capitalism is really a set of rules designed to protect wealth

for those who already have it. For the most part. When they win they win, and when they lose, they stil win.