I was listening to the talking heads on CNBC yammer on about the usual, and I heard one classify the recent moves in Congress to tax private equity fund managers' fees as income as "a war on wealth." If you think I'm kidding, watch this video (the exact news clip I saw) and judge for yourself.
There is indeed a "war on wealth," but the war is about making sure that only a select few have wealth while the rest of us slave away in the fading hope of ever generating any. The Post article about the "Blackstone Tax" is a perfect example of what I mean–how insane is it that Charles Grassley, one of the most ardently fiscally conservative Senators and the author of the draconian new bankruptcy laws, is fighting for the populist side, while Chuck Schumer is defending corporate welfare for Manhattan’s financial elite?
The vast majority of us will never have access to the kind of multibillion-dollar sums being tossed around in these private equity firms that supposedly generate jobs and investment, but seem chiefly designed to fatten the managers' pockets. For most of us, owning a home or having a rich relative croak on us is the only way to generate significant assets beyond our income. Indeed, David Lereah, the former chief economist for the National Association of Realtors, once said that people who paid off their mortgages were "unsophisticated" and should have used the equity from their homes to invest, consume, etc. Lereah has been largely disgraced by the army of housing bubble bloggers who tracked his many contradictions and pronouncements, and he recently left the NAR.
The problem is though Lereah is a hack and a shill, he wasn't wrong--home equity IS the only way many people will ever have wealth.
Read the rest of
Martin Bosworth's piece at Scholars & Rogues.
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