October 29, 2021 | Reading Time: 4 minutes
What if I told you the very obscenely rich are not the respectable hard-working ‘job creators’ you’re told they are?
Rampant criming is more like it. So stop being so polite.
Imagine a world in which two things are true. One, you can make piles of cash as a direct result of breaking federal law. Think of it as theft by other means. Two, you won’t ever get caught or be punished. Think of it as a veto on the rule of law. I’m not talking about illicit drug cartels. I’m talking about the respectable world of the very obscenely rich.
In fact, according to Businessweek, the heads of the country’s biggest corporate firms almost never face investigation and prosecution by the federal government for using insider information on the stock market. That’s despite their portfolios almost always beating the markets.
According to Businessweek, the heads of the country’s biggest corporate firms almost never face investigation and prosecution by the federal government for using insider information on the stock market. That’s despite their portfolios almost always beating the markets.
Trading on information that has not been made public is illegal. Yet it happens all the time. According to reporter Liam Vaughn, federal regulators seem to think it’s not a big deal. Lax oversight encourages the already long-held view that “trading on sensitive information was widely considered a perk of being an executive at a publicly traded company, and that thinking seems to persist,” even among the feds.
“A growing body of research suggests that many insiders are trading well thanks to more than luck or judgment,” Vaughn wrote for the Oct. 4 issue. “It indicates that insider trading by executives is pervasive and that nobody — not the regulators, not the Department of Justice, not the companies themselves — is doing anything to stop it.”
Vaughn reported a study by Daniel Taylor, a professor at the Wharton School. He and his co-authors found that “insiders who traded were able to avoid significant losses, particularly in instances when a company’s results ended up having to be restated. Time and time again, ‘insiders appear to exploit private information’ for ‘opportunistic gain.’ … Cheating, they’d discovered, seemed to be everywhere.”
The popular view, advanced most vocally by the Republican Party, is the very obscenely rich deserve being very obscenely rich. They earned their wealth. They built their companies. They invested wisely. They created jobs. They are the backbone of the American economy. They have created the impression that what’s good for the very obscenely rich is good for America. And anything that’s bad for the very obscenely rich is bad for America. Just ask Tilman Fertitta, owner of Landry’s, a national dining, hospitality and gaming corporation.
Asked what he thought of raising taxes on the very obscenely rich, Fertitta told Fox: “All it’s going to do is make me not build as much because I won’t have the ability to create so many more jobs and then you are paying so many different taxes. Every employee pays: payroll taxes, all your sales taxes. All the taxes they pay. It’s truly a mistake.”
It’s truly a lie.
The reality is sinister. When it comes to insider trading, the very obscenely rich are “profiting at the expense of regular people,” thus breaking “America’s basic bargain,” wrote Preet Bharara, former US attorney for the southern district of New York, which covers Wall Street. In a 2018 op-ed for the Times, he said the very obscenely rich “should not have an unfair advantage over the everyday citizen.”
Let’s stop being so polite, though.
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The very obscenely rich do not represent America. According to new data from the Federal Reserve, reported recently by CNBC, nearly 90 percent of everything being bought and sold on Wall Street is being bought and sold by the wealthiest 10 percent. That suggests, to me anyway, financial markets are separate and distinct from the regular economy, and anyone telling you that what’s bad for the very obscenely rich is bad for America is someone trying to scam you.
Why wouldn’t they? Not only do they have the blessing of the United States government, in the form of its doing nothing to stop rampant criminal behavior, but apparently, to be a member of the exclusive club of the very obscenely rich requires a capacity for cheating, lying and subterfuge that would scandalized most normal people, especially given the widespread understanding, advanced most vocally by the Republican Party, that the very obscenely rich are respectable, admirable, wise — nearly superhuman amid such fame and wealth.
Indeed, our culture venerates criminal minds, as long as they are white and rich, to such a degree that we mind when the very obscenely rich insult us to our faces. Fertitta, who owns the Houston Rockets, added: “We have 4,000 (job) openings right now. Between the Golden Nugget, all the restaurants and entertainment venues; people just don’t want to work anymore. I don’t know what happened to that part of capitalism.”
People do want to work. They just want to be paid a fair wage. But even if they didn’t want to work, who could blame? After all, the people who they’re supposed to admire didn’t earn their wealth. They cheated.
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As always, the scandal is not what’s illegal, but what’s legal (and in this case, even if technically illegal, it’s treated as legal).