JavaScript disabled. Please enable JavaScript to use My News, My Clippings, My Comments and user settings.

If you have trouble accessing our login form below, you can go to our login page.

If you have trouble accessing our login form below, you can go to our login page.

Billionaire bashing: the new class war

<em>Illustration: michaelmucci.com</em>

Illustration: michaelmucci.com

So great was demand for a piece of the Mega Millions action last week that people waited in lines to buy lottery tickets. After the jackpot reached half a billion dollars, it made more people play, which made the jackpot and the pool of competitors even bigger, even though the odds of winning remained at only about one in 170 million. On Saturday night, after the lottery balls fell, three tickets had won a share of the $US640 million ($618 million) jackpot.

Each winner will receive $205 million, pre-tax. The three tickets were bought in Red Bud, a small farm town in Illinois, in urban Baltimore and somewhere in Kansas. The losing tickets were bought everywhere by an estimated 100 million people. Three families will now be transformed. But even these super-sized jackpots pale when compared with the money made by the top buccaneers of global capitalism, hedge fund managers.

Last year, Ray Dalio made six times more than the Mega Millions jackpot - almost $4 billion. He plays mega billions. Dalio heads the world's largest hedge fund, Bridgewater, based near his home in Connecticut. His billions were delivered by his Pure Alpha fund, which has about $67 billion under management and made a profit of $13.2 billion last year.

Dalio thus topped a list of the richest 25 hedge fund managers published on Friday by Absolute Return magazine. The average income for these 25 managers was $550 million. A natural response to this sort of income is that something obscene is at work with capitalism, creating the sort of divide between top and bottom or, more tellingly, between top and middle, that must eventually have social and political consequences.

Last year, the Tea Party movement and the Occupy Wall Street demonstrations pointed to a percolation of social anger. Occupy Wall Street did leave one indelible phrase in the public consciousness - ''the 1 per cent'' - a term which now routinely crops up in public dialogue. It is shorthand for the unprecedented concentration of wealth in the hands of the top 1 per cent of the population in the capitalist system, against the share of the remaining 99 per cent. It is a theme resonating in troubled Europe and also applies in China.

Disgust at yawning inequality is also the subtext of the new mega-hit movie, The Hunger Games. Since the film featured in this column last week after its opening weekend, it has taken $215 million at the box office in the US in its first eight days, the biggest opening for a non-sequel ever, and is also the No.1 book and No.1 album in America. It is the No.1 movie in Australia.

The Hunger Games is a cultural phenomenon as big as the Twilight saga but will leave a much deeper bite on teenagers. It features a gilded Capitol inhabited by a decadent class of loathsome, privileged hedonists whose lifestyle is fed by the resources of the oppressed hinterlands. Extreme capitalism has defeated democracy and fairness. The young heroine is a coalminer's daughter from the poorest outland. It is not subtle.

Also in cinemas is the excellent Margin Call, starring Kevin Spacey, which depicts a Wall Street investment bank at the very peak of the 2008 credit meltdown. It is a thinly disguised portrait of Lehmann Brothers, which collapsed into insolvency and disappeared, brought down by its own excesses.

Another blow was struck last month in an opinion piece in The New York Times written by Greg Smith, an executive director at Goldman Sachs. It began:

''Today is my last day at Goldman Sachs. After almost 12 years at the firm … I can honestly say that the environment now is as toxic and destructive as I have ever seen it … It makes me ill how callously people talk about ripping their clients off. Over the last 12 months I have seen five different managing directors refer to their own clients as 'Muppets'.''

It caused a storm of comment. Even the Muppets responded. It was not the first such public salvo fired at Goldman, just the first fired from within. In 2009, the bank was famously targeted in a 9000-word investigative hatchet job in Rolling Stone magazine, which argued that Goldman Sachs had exploited and exacerbated every major financial crisis since and including the Depression:

''The bank's unprecedented reach and power have enabled it to [manipulate] … whole economic sectors for years at a time … all the time gorging itself on the unseen costs that are breaking families everywhere … The bank is a huge, highly sophisticated engine for converting the useful, deployed wealth of society into the least useful, most wasteful and insoluble substance on Earth - pure profit for rich individuals.''

Another cynical expose´ of Wall Street came via a superb and detailed documentary, Inside Job, which won the 2010 Academy Award for Best Documentary. Last year, an enraging documentary, Chasing Madoff, picked up the theme of extreme laissez faire capitalism by detailing the abject failure of the Securities and Exchange Commission to investigate a massive fraud even after a report entitled The World's Largest Hedge Fund is a Fraud was dropped in its lap in 2005. The SEC did nothing. Three years later the fraud unravelled during the 2008 financial crisis, destroying $50 billion in the process.

The impression of obscene excess in capitalism has infected the 2012 US presidential race. One Republican candidate, Newt Gingrich, has waged a scorched-earth campaign against his party's front-runner, Mitt Romney, sneering at the multi-millionaire Romney as the ''Wall Street'' candidate. After Romney wins the Republican nomination, Barack Obama's re-election machine will pick up the theme.

Class war is back. On both sides of the Atlantic. The consequences have a long way to run.

140 comments

  • There's no "class war" here in Queensland ......... Clive "Billions" Palmer bought it all.

    Commenter
    J. Fraser
    Location
    Queensland
    Date and time
    April 02, 2012, 7:34AM
    • You are an exceptional Qeenslander......you noticed it.

      Commenter
      caledonia
      Location
      sydney
      Date and time
      April 02, 2012, 11:59AM
  • An admission by the LNP Financier, Clive Palmer that he made statements about Bob Brown and the CIA to take the heat off the LNP in Queensland during the election campaign was an admission of trying to influence an election outcome. However, as media moguls have been doring this for some time, do everyday Australians really think about it. Probably not, they can't think past the front page headline.

    Commenter
    waterhen
    Date and time
    April 02, 2012, 8:05AM
    • Yeah, the masses are stupid and that's why things aren't going well for those who I am politically and ideologically alligned to. What a watertight assessment.

      Commenter
      Act Rationally
      Date and time
      April 02, 2012, 9:59AM
    • Sounds just like those union ads and stickers you see everywhere about Workchoices, or is that sort of influence good?

      Commenter
      GS
      Date and time
      April 02, 2012, 11:32AM
    • @Act Rationally

      It is despairing that the masses are stupid.

      Power corrupts, absence of power leads to subservience.

      Yet only a few realise this.

      Perhaps it has something to do with the low level of education in AUS.
      Or
      A lack of revolutionary spirit.

      Commenter
      caledonia
      Location
      sydney
      Date and time
      April 02, 2012, 12:06PM
    • Revolutionary spirit? I prefer PM Gillard's stable government, where both houses are on-side, to revolution and anarchy.

      Commenter
      Bennopia
      Location
      West Footscray
      Date and time
      April 02, 2012, 1:41PM
    • Not sure about thinking past the front page headlines I cant get past how 20 odd years in qld and 16 years in nsw of labor governments has done to these states.sent them broke,and thats what the federal government is proceeding to do in just 6 years.Answer me this question.without the likes of palmer who will employ the majority of people?..the governments?.If so thats known as socialism or dare I say communism,But thats what labor stands for isnt it.

      Commenter
      fishman
      Date and time
      April 02, 2012, 2:24PM
    • @Miners are good people because they employ everyone.

      Maybe in your town, but if you look at the numbers there are less people digging up our ground. and employed due to digging it up, than sitting on the dole que, considerably less actually. With mining pushing up the dollar it is also decimating most other sectors of the economy that actually do employ the majority of Australians, like tourism manufacturing and retail.

      Commenter
      someone
      Date and time
      April 02, 2012, 3:00PM
    • GS, Unions represent millions of workers across the country. Billionaires represent themselves, and cloak their own self interest with national interest. You comparison is not justified.

      Commenter
      The Redman
      Location
      Canberra
      Date and time
      April 02, 2012, 4:13PM

More comments

Comments are now closed
Featured advertisers