When you think you’ve seen everything imaginable in the “shameless” category, count on someone in finance to reach a new low.
The latest example comes from Davos. Private equity billionaire, Blackstone’s Steve Schwarzman is famed for his spending ($6 million 60th birthday party) and verbal excesses (comparing a proposal to end the carried interest tax loophole that made him super rich as opposed to merely rich to Hitler invading Poland). But those have either been to gratify his outsized ego or to defend his money machine. And although extreme, Schwarzman is hardly alone. In fact, Wall Street throwing tantrums over even small-potatoes threats to its profits is part of the new normal.
But Schwarzman at Davos has revealed himself to be utterly out of touch. His remarks in a Bloomberg interview:
What’s remarkable is the amount of anger, whether it’s on the Republican side or the Democratic side. Bernie Sanders to me is almost more stunning than some of the stuff going on on the Republican side, How is that happening, why is that happening? What is the vein in America that is being tapped into across parties that’s made people so unhappy? That’s something you should spend some time on.
For someone whose major business consists of investing in real-economy businesses, that’s an astonishing admission of cluelessness. Schwarzman is undeniably a fine actor; you have to be to get to the top of his heap. Yet his tone of voice, as well as the cluelessness of his remarks, say he is genuinely perplexed. Haven’t people like him managed to create the best of all possible worlds? Why doesn’t everyone see that?
Read his statement again, or listen to the segment. “What is the vein…that is being tapped into…that is making people so unhappy?” has a bizarre lack of agency. And it also suggests that the the unhappiness is somehow being created or cultivated aso opposed to is a long-standing, genuine sentiment that has finally found political outlets. As Clinton said, “It’s the economy, stupid.” Yet Schwarzman blandly intimates that populists on both sides of the aisle have managed to stir up such malcontent. Something must have failed on the messaging front.
And that’s before getting to the fact that his remarks confirm what clued-in Americans know well: the top wealthy lead lifestyles that are so disconnected from the rest of the public that they are dangerously out of touch. And elites who think they can remove themselves from the societies on which their lifestyles depend at no risk are kidding themselves. Despite their greater ability to put themselves at a class remove, the considerable interdependencies of our modern world means they can’t achieve real independence. They need chips, medical care, food, and other necessities. Yes, in an extreme scenario, they might be able to lay up supplies to last for years against the scenario that some of the more paranoid, like Pierre Omidyar, are worried about, that of an uprising. But most of them hope to live longer than that.
Their best protection for the 0.1% is more engagement in the societies that have provided them with their lucre, and on which they ultimately depend, as much as they’d like to deny that. Yet most of them conceive the whole point of winning as circulating only in the most exclusive circles and being able to treat everyone else as inferiors. You can see that in Schwarzman’s interaction: he can’t refrain from giving the Bloomberg reporter an assignment to figure out why the natives are restless. But he’s a big part of the problem, if not the problem. Exactly how many jobs and even companies have been lost, and wages and pensions have been cut, to fatten his bank account? Does he truly not get it, or does he somehow think that if people like him say the right thing, the anger will go away? He’s not going to get the caliber of information he needs to penetrate his bubble even if he were to hire someone to investigate. Guys like Schwarzman are incapable of getting past their preening self-regard, and that blindness puts them at risk.