REALITYCHEX

An Open Letter to a Hedge Fund Billionaire

December 7, 2011   ·   1 Comments

Source: NYTX

By Marie Burns:

Leon Cooperman, billionaire hedge fund manager and Goldman Sachs veteran, has had quite a week. Last Wednesday, as Andrew Ross Sorkin of the New York Times reports, Cooperman wrote an open letter to President Obama complaining that “the divisive, polarizing tone of your rhetoric is cleaving a widening gulf, at this point as much visceral as philosophical, between the downtrodden and those best positioned to help them.” Cooperman, of course, considers himself among those “best positioned to help … the downtrodden.” Cooperman says he has “been deluged with hundreds of e-mails and phone calls about the letter, ’99.9 percent of it positive.’” Everybody, except that pesky one-tenth of one percent, apparently loves him.

Yesterday, things got even better for Cooperman, as William Barrett of Forbes reports: “… Cooperman has won his battle to avoid paying $5 million in penalties the Internal Revenue Service demanded over a disputed $43 million contribution to his own private foundation…. Cooperman still is required to pay nearly $14 million plus interest to cover what the IRS said was a non-tax deductible contribution.” That $5 million, of course, won’t be going into the public coffers. So, ultimately, it will be coming out of your pockets. But, hey, it’s a big win for Leon Cooperman, champion of the downtrodden.

Dear Dr. Cooperman,

As President Obama is busy right now, I thought I’d write to you on behalf of the 99 percent. You and I are about the same age — you might say we’ve led parallel lives — so I think I know where you’re coming from and can be of some help in explaining to you why President Obama has stooped to calling you an offensive term like “billionaire.”

Like you, I grew up in a lower-middle-class neighborhood. My father was a bombardier in World War II and after the war he went to college on the G.I. Bill. My parents had an F.H.A. mortgage on the little house where they reared me in Hialeah, Florida. The monthly mortgage payments were $50. Like you, I went to public schools, and when I was graduated from high school, I attended the University of Wisconsin – also a public school – on a publicly-funded scholarship. Most of my high-school classmates attended college, too; the majority of them were the first in their families to go to college. (In your letter to President Obama, you don’t mention your military service, so even though there was a draft when you were of age, maybe you managed to avoid service.)

Fifty years later, I keep in touch with a number of my high school classmates. For the most part, they have lived the real American dream: they attended college, they married, they became educators, engineers, doctors, architects, publishers, civil servants. And, yeah, there are some cops and small businesspeople and tradesmen among them. Some of them had well-paying jobs because their unions made sure of it. My classmates reared families, they paid for their children’s educations – sometimes with the help of Pell Grants or other public financing. They saved for vacations and retirement. Any cash they left in the bank, the federal government insured. If they took out a new mortgage, the rate was fixed, they knew what their payments would be and the banker knew they would make the payments. If they got sick, their employer-based health insurance helped pay their medical expenses. If they got laid off from work, they collected unemployment insurance until they could find new jobs. And the new jobs were there. Many of my old classmates are retired or contemplating retirement on comfortable nest-eggs, supplemented by government programs like Social Security, Medicare and V.A. benefits. If their employers haven’t robbed their pension funds, many of my high school friends have nice pensions, too.

Fortunately, I don’t think any of my classmates turned out like you. They are genuinely nice people whose lifework contributed to the betterment of American society, not schmucks who have spent their lives grasping for dollars, outmaneuvering competitors, living for the “gotcha” moments and cutting ethical corners until there were no corners left to cut. They are not self-aggrandizing, self-delusional scam artists who think making a fast buck is a “hard-won accomplishment” or that “giving back” means establishing a tax-exempt foundation. And my friends aren’t double-dealers like your colleagues at Goldman Sachs – Bob Rubin, Jon Corzine and Henry Paulson (like you, Henry is thin-skinned; he doesn’t like us little people to call him “Hank”) – who slip through the revolving door to what they cynically call “public service” where they invent new ways to make life better for them and more difficult for the other 99 percent of Americans. My classmates don’t buy politicians to cut their taxes or create special loopholes that benefit only them. My high school chums don’t deal in shady financial instruments, then expect the American taxpayer to bail them out when it turns out they’re not so smart and the deals go terribly wrong.

Oh, and I hope my friends don’t derive their political views from the Wall Street Journal op-ed page, or from multi-millionaires like Christie Todd Whitman and the New York Times‘ Bill Keller, as you do. That in itself helps explain why you are so stunningly clueless.

For our generation, the American dream was possible because government and business leaders made it possible. They understood that the social contract – and good economic policy – relied on a vibrant middle class. Here was the deal: Americans (at least white, male Americans) would receive a fair income that would allow them to purchase Mercuries, Maytags and Motorolas. Employers would also pay health insurance and would recognize unions who negotiated for better working conditions. Local and state governments would finance free- or low-cost education. The federal government would keep us safe from foreign invaders, polluters, careless working conditions and rotten food; to build roads and bridges to facilitate commerce; and to maintain a myriad of programs from the postal service to the Corps of Engineers to the weather service. The federal government would be funded largely through a progressive tax structure. Most Americans made enough money to pay income taxes. When you and I were graduated from high school, people who make the kind of income you do today sent about 91 percent of it to the federal government. Income inequality in the U.S. was at a near-low when you and I went out into the world.

Today, thanks to people like you, a lot of that has changed. Income inequality is at its highest level since the Gilded Age. Even though you’re a billionaire, you pay taxes at less than half the rate I do. Your hedge-fund income is taxed at 15 percent. That’s down a bit from 91 percent. The progressive tax was a great income leveler, but it wasn’t everything. The social contract also called for respect for American workers. We were both the makers and the market. Henry Ford paid his workers a fair wage because he wanted them to be able to buy his Model T’s. But today, the multi-billionaire Walton family pays its workers minimum wages and often won’t hire them full-time; the company continues to chisel away healthcare benefits. Billionaire Jeff Bezos was running a Dickensian sweatshop in Allentown, Pennsylvania. Jeff Immelt’s company GE paid no federal taxes in 2010 and, despite his “jobs czar” appointment, continues to shift American jobs overseas. He and your other corporate friends are keeping billions offshore to avoid paying U.S. taxes. The billionaire Koch brothers have been caught time and again in illegal activities, even doing business with Iran, but they have bought so many politicians they’ll never truly pay for their crimes. They, and some of your other friends, have bought legislators to stifle unions and lower wages and benefits for almost every kind of American worker. Your Wall Street gang – from Goldman to CitiGroup to JP Morgan Chase – routinely cheat competitors, investors, customers and the American taxpayer. If one of you gets caught, you pay a small fine, which you treat as a cost of doing business – kind of like paying for paperclips and office chairs.

You congratulate yourselves on your “charitable work,” work that would not be necessary if you had not so impoverished Americans that they had to rely on handouts. You suffer under the delusion that money which should have gone to the public good is better spent on the charities you prefer. Sorry, I’d rather have safe bridges and safe food than see my money go into the (failed) tax dodge/“charitable foundation” you established.

Much worse, you and your ilk have shattered the social contract. Ordinary Americans no longer get a fair shake in Leon Cooperman’s America. You have deprived most young people today of enjoying the life this nation afforded you and me. My friends and I made something of our lives; that you have thrown yours away on Wall Street, and even brag about it, is no one’s fault but your own. You had the same chance we did to become a good citizen. You chose instead to tear down the country that gave you so many opportunities. Even yesterday, you took another $5 million out of the pockets of ordinary Americans because you didn’t think it was “fair” that you got caught cheating. You try to paint yourself as an innocent victim of anti-capitalist, socialistic forces. No, President Obama – and Occupy Wall Street – want capitalism back. We want it to work again for ordinary Americans. We want you Wall Street moguls to have to start playing by the same rules we do. We’ve had enough of “Two Americas.”

This brings us back to your ludicrous criticism of the President. Patriotic Americans have been trying for two years to get President Obama to stand up for ordinary citizens. Now that he is finally inching in that direction, you are offended by his “tone.” You don’t think the President should use disparaging epithets like “millionaires and billionaires” to describe, well, millionaires and billionaires. You don’t think the President should reveal that you’re getting richer while the rest of us are getting poorer. In your twisted mind, telling the truth is “pandering” and “appealing to people’s worst instincts.” You say asking you to pay your fair share is the “polarizing vernacular of political militancy.” You urge the President to “rise above the partisan fray.” You’d want him to pretend the “partisans” don’t include Republicans – and not a few Democrats – whom you and your friends have purchased to do your bidding. You think he should keep quiet about Republicans’ hard line against progressive taxation. You think he should shut up about their refusing to fund Wall Street regulatory agencies. You want to keep operating as if Wall Street were the Wild West and condemn the President for not hiding your misdeeds and those of your political allies. You want President Obama to show you more respect. Ironically, by writing such a foolish letter to him, you have exposed yourself as an arrogant crackpot. Not sure how much respect “pompous blowhard” will get you. But nice try.

Here’s some advice from the humble on humility. Write to the President and apologize for your ridiculous hubris. And pay the IRS – that is, the American taxpayer – our $5 million. We both know that fake charity deal you tried to use as a tax dodge was but one of thousands of times you cheated and gamed the system to your advantage. The only difference is that this time, you got caught.

Marie Burns

By admin

Readers Comments (1)

1. Ben Roth says:

   Right out of the park Marie. Thanks
   BTW you had just the little line about his military service?
   I only 3 years older than the “I don’t get no respect” Leon Copperman. I joined the Army right out of HS. I was the law you had to serve. I went to basic with Cops, Firemen, Lawyers, etc. How did he miss out?

   6:57 pm on October 1, 2012

    Reply

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