Back in May, I made Reuters
headlines when I booed financier turned Obama "car czar" Steve Rattner during Ira Sohn's annual investment conference in New York.
Listening to him tell one lie after another about the bankruptcy of General Motors was bad enough. (And believe me... I know a little bit about GM's balance sheet, having been the first analyst anywhere to predict the carmaker's bankruptcy as early as 2005.) But having to listen to this scumbag lecture me about the evils of "income inequality" was more than I could bear.
This man was personally implicated in bribing New York state pension officials. He made close to $500 million via his private-equity fund (Quadrangle), while his investors underperformed municipal bonds. This guy lives in a $15 million home on Martha's Vineyard and in the same Fifth Avenue apartment building as George Soros.
This is a guy who flies his own plane... whose wife is the leading fundraiser for the Democratic Party. This is Arthur Sulzberger Jr. and Michael Bloomberg's best friend. And Barry Diller's. This guy spent his entire life in the rarified world of Ivy League colleges, investment banks, and New York City's most elite social circles.
And yet... even with all these advantages, he ended up accused of bribing New York State pension officials to get them to invest with his private-equity firm. (By the way... I have to hand it to Obama on appointing Rattner as the "car czar." Obama knew about the corruption charges, and appointed Rattner to restructure General Motors anyway. After all, who better to steal from bondholders than a crook?) And now, Rattner was going to lecture us, the great unwashed, about "income inequality." It was simply unbearable...
After spending about 20 minutes congratulating himself on the bailout of GM (which cost taxpayers roughly $80 billion and bondholders roughly $27 billion), Rattner put up a chart he seemed to believe indicated rich people in America were making far too much money. I let out a loud "Boooo...."
Really, it was more of a moan of agony. I just couldn't take anymore. How could such a person ever have been allowed to reach such levels of power and influence? How could an idea as obviously repelling as government-directed income redistribution ever be discussed at an investment conference filled with thousands of capitalists?
Rattner's response to my loud "boo" was remarkable. In his most condescending, the-government-knows-best tone, he said, "I hope you're joking." As if to even question the role of government in redistributing the wealth of our society made me some kind of a mental invalid or moral outrage. I replied, in a much, much louder and more hostile tone, "YOU'RE THE JOKE
When I write about not recognizing my fellow Americans... and feeling like I live in a country called Amerika, I'm talking about the Rattnerization of our country. This guy is the very embodiment of the term "limousine liberal." He wants to raise your taxes because his income is now all sheltered. And he thinks he knows how to use your money far better than you do. In his mind, he's doing you a big favor when he raises your taxes.
As the whole global warming thing falls apart (hard to believe it's lasted this long), guys like Rattner need a new slogan. They need a new calling – a new, better, and simpler reason to motivate voters. Their cry will be "income inequality." The free market has failed, they say, because some people are getting very, very rich.
And Rattner knows the 50% or so of the people who no longer pay federal income taxes will believe income inequality is a problem (instead of the result of a wonderful technological revolution). And they will support every possible measure to correct "the problem." This will keep people like Rattner in power for a long, long time.
Look for Al Gore's next movie to be about income inequality. You think I'm kidding. But I'm not. Rattner even has a hockey stick chart, just like Gore did, showing that income inequity is soaring... and threatening to destroy us all.
Well, our buddy Rattner is back in the headlines this week... And it's not because of General Motors' initial public offering. New York Attorney General Andrew Cuomo filed two lawsuits this week accusing Rattner of bribing folks to invest in his private-equity firm, Quadrangle.
Cuomo wants at least $26 million from Rattner and a lifetime ban from the securities industry. Separately, the SEC announced Rattner agreed to pay $6.2 million to settle similar charges. Rattner issued the following statement:
While settling with the SEC begins the process of putting this matter behind me, I will not be bullied simply because the Attorney General's office prefers political considerations instead of a reasoned assessment of the facts.
This episode is the first time during 35 years in business that anyone has questioned my ethics or integrity – and I certainly did not violate the Martin Act. That's why I intend to clear my name by defending myself vigorously against this politically motivated lawsuit.
The suit alleges Rattner secured investments for Quadrangle by arranging for a firm to distribute a movie produced by David Loglisci, the New York retirement fund's chief investment officer, and his brothers. Rattner also allegedly contributed $50,000 to the reelection campaign for former New York Comptroller Alan Hevesi.
So far, Hevesi pleaded guilty to a corruption charge and agreed to cooperate in Cuomo's investigation. In total, seven people – including Hevesi and Loglisci – have pleaded guilty. Rattner hasn't, though he exercised his Fifth Amendment right not to answer questions under oath 68 times.