Friday, January 31, 2014

Billionaire Tom Perkins' Kristallnacht Fears: Isn't There a More Accurate Historical Parallel?

by Nomad

Recent remarks from one member of the super-wealthy class comparing the treatment of Jews to how the 1% is being treated by progressive stirred a lot of controversy. That should have been expected. The Nazi comparison was deeply flawed but another historical period- the time just before the French Revolution- might be a lot closer to the mark.

Recently venture capitalist Tom Perkins raised a bunch of eyebrows after comparing the so-called persecution of wealthy Americans to the Nazi campaigns against the Jews. As high level executive in many computer and technology related companies Perkins' net worth has been estimated at $8 billion. 
In an open letter to the (News Corporation-owned) Wall Street Journal, Perkins  said:
"Writing from the epicenter of progressive thought, San Francisco, I would call attention to the parallels of fascist Nazi Germany to its war on its 'one percent,' namely its Jews, to the progressive war on the American one percent, namely the 'rich.'
Progressive war? And he did not stop there.
"This is a very dangerous drift in our American thinking. Kristallnacht was unthinkable in 1930; is its descendent 'progressive' radicalism unthinkable now?"
Progressive radicalism descended from Nazism? Really?

Offensive, Insensitive and Incorrect
Not only were Perkins remarks idiotic, they were also extremely insensitive. When the statements aroused the widespread scorn, he was forced to take them back, in the all-too-typical fashion of one faced with public outrage. ("I chose the wrong words but I really meant what I wrote.") 
And keep in mind, this was not some unplanned interview from a journalist trying to get Perkins to say something controversial. The letter to the editor of an internationally-read newspaper was presumably carefully thought out. He had time to erase and scratch out and to ask himself: Is this right? Is it.. sane?

Perkin's statement was most offensive to the true victims- the families of the Jewish victims of the Holocaust. Perkins also tried to assert in his letter that the Jews were the 1% of Germany, a inaccuracy which one progressive site quickly made mince-meat of.
Actually, Adolf Hitler and the National Socialist Party were eager to climb into bed with the German 1 percent, other than rich Jews, of course, whose money could simply be confiscated later. In fact, it has been argued that without support from rich German industrialists, Hitler would never have risen to power in 1933. 
(Wealthy American industrialists also threw their support behind Hitler. That's something Nomadic Politics has also touched on in the past.)

The Night of Broken Glass
To abandon the sentiment of humanity is not merely to renounce civilization and to relapse into barbarism, it is to share in the blindness of the most brutish brigands and savages; it is to be a man no longer, but a cannibal. 
François Fénelon (1718)
The events that became known as Kristallnacht or "The Night of Broken Glass" were to provide the world with conclusive proof of what the Nazi government was all about. That night was a foreshadowing of events yet to come.

On November 9, 1938, Jewish people in Germany and German-controlled territories were beaten, arrested and killed. Hundreds of synagogues were burned to the ground by mobs while the police did nothing. Homes were ransacked and untold numbers of Jewish businesses were vandalized. In what would prove to be a hint of the future tragedy, some 1,000 people were killed and more than 30,000 Jews were sent to concentration camps.


One survivor, Max Uri,  who was 17 years old at the time of the events described how easily his family clothier shop was stolen.
Three SS-men entered my uncle's store and told him, 'Give us the keys to the store!' But (my uncle) Moses Zwick refused to give them the keys. And so they knocked out all his teeth, took the keys away, and he was never allowed to set foot in the store again. 
From that moment, his family store ceased to exist. But the persecution did not stop there. Uri was taken into custody by the police.
I was arrested and detained in the 9th district, in a riding school on Pramergasse, along with about a thousand other Jews, who had been taken from their apartments, some of them in their pajamas and underwear. At about 3 AM, they released those under 18 and over 60 and told them to go home. Outside, the mob had gathered and was waiting for us. A high police official agreed to protect us, but only until he had counted to 10. I started to run, which fortunately, as an athlete, I had no problem with.
Another eyewitness, Julius Chaimowicz
"In 1938 looting of Jewish stores was very common. Our apartment was on the fourth floor. We had bars in front of the window; either my father or my grandfather had put them up so that we (children) would be able to look out but not fall out of the windows. We saw the Jewish grocery store being looted. The goods were simply thrown out of the window."
Government officials were quick to point to the night of violence as an example of public disgust for the Jewish minority after a German diplomat was murdered. Outsiders saw it as a carefully orchestrated plan by the Nazis to strip the Jews of their last remaining rights.
In the days that followed the Nazis used the events to blame the Jews. The government fined the Jews a billion marks (or $400 million in 1938 dollars) for the diplomat's death. And they were not finished:
As repayment, the government seized Jewish property and kept insurance money owed to Jewish people. In its quest to create a master Aryan race, the Nazi government enacted further discriminatory policies that essentially excluded Jews from all aspects of public life.
As we know in hindsight, the night of broken glass was the start of something truly barbaric.

Glaring Similarities?
This then is the how Perkins feel that the super-wealthy are being treated in the US at the moment. Maybe I was sleeping but I don't remember seeing progressive radical thugs in boots dragging poor super-wealthy victims out of their Park Avenue tower apartments and throwing them into jail. I must have missed the reports of all those villas burned to the ground. Where was I, I wonder, when all those Rodeo Drive shops were looted and torched?

What I have seen is, five years after an economic meltdown, America's super-wealthy seeing their wealth reach an all-time high.
According to Forbes magazine the 400 wealthiest Americans are worth a record $2.02 trillion (£1.4tn), up from $1.7tn in 2012, a collective fortune slightly bigger than the entire Russia's economy.

Despite Perkin's contention, I have seen, not a night of  broken glass but what I have seen is decades of prosperity for a very few, the result of the rise of the rightward-shifts in Congress the engineered decline of labor unions and a far lower tax rates on the highest incomes. I have seen the richest Congress in history, begrudging the poor any government assistance whatsoever, even for emergency relief.

Self-Serving
Clearly Perkins' sense of history is askew. Living in your bubble of nodding toadies and luxury tends to do that to a person. This clumsy self-serving attempt at 1% victim hood was exactly the kind of thing that tends to reinforce the animosity that so many in the lower and middle classes feel about the super-wealthy.

With homes in Belvedere, Marin County, California and an Elizabethan mansion Plumpton Place, in East Sussex, England, as well as a penthouse atop the Millennium Tower on Mission St in San Francisco's financial district Perkins self-portrait as society's scapegoat is hardly credible. 

Something more that other news outlets failed to mention. He is currently on the Board of Directors of Rupert Murdoch's News Corporation. Incidentally Perkins when he is off sailing his yacht, is represented on the New Corp board by attorney and conservative legal scholar, Viet D. Dinh, a man you might not have heard of.

Dinh is also considered to be the chief architect of The Patriot Act which some have called the most ant-constitutional legislation ever written. (This legislation, critics have charged, was very much like Hitler's "Ermächtigungsgesetzquot". The "Enabling Act" which effectively ended all pretense of democracy in Germany and established a legal dictatorship of Adolf Hitler. )

Even the fact that he would use his News Corp board membership to use the Wall Street Journal- owned by News Corp- as his personal blog is revealing.
But that connection doesn't stop. As the ruckus over his letter grew, News Corp's Fox News Business contributor Charles Payne rushed in to defend (as much as humanly possible) Perkins' nonsense. Former Wall Street analyst at E.F. Hutton Payne is just another opinion-for-hire fixture at Fox News, said that Perkins "may be a couple of years ahead of the curve."
Or, he may not. 

He could just be a bitter grumbling rich person who- unlike the rest of us- is able, through his News Corp business ties, to air his complaints in once well-respected newspapers.

When it comes to the middle-class perception of the 1%, what draws the most disgust, I think, is their utter selfishness, their arrogance when asked to contribute a greater percentage of their wealth. Particularly, in a time when all Americans are having to cut back. At a time when many Americans are losing their homes, the super wealthy, like Perkins are thinking about buying yet another. (He only stays two months of every year in his Sussex castle.)
It's their lack of empathy for their fellow citizens, indeed for humanity in general that makes them the object of disgust for so many people.

In his ill-famed letter, Perkins wrote.
"In the Nazi area it was racial demonization, now it is class demonization."
If the public has demonized you, Mr. Perkins, it is unfortunate. But perhaps it is because they think you and so many like you, have become in the eyes of the general public, as devilish as demons. If as Pope Francis has said, the world has become an idolater of this god called money, then people like Perkins are its head choir boys.

Okay, I've had my rant. I can wipe the progressive radical froth from my lips. There, now. All better.

However, purely from a historical point of view, let's examine how accurate is Perkin's comparison? Couldn't we find a more accurate historical parallel than Kristallnacht?

A More Accurate Parallel
The first man who, having fenced in a piece of land, said "This is mine," and found people naïve enough to believe him, that man was the true founder of civil society.- 
Jean-Jacques Rousseau, Discourse on Inequality, 1754
Tom Perkins may need to look at another episode of European history to find a more concise parallel. Not Germany and Kristallnacht but France before the Revolution. 
According to the book, The French Revolution: An Economic Interpretation by Florin Aftalion:
It is quite plain that these taxes were unequally borne by different sections of society. This inequality had an important economic consequence, namely, that whatever the actual needs of the Treasury, taxation could not be further increased without a radical reform. Indeed, it had become virtually impossible to make the French pay anymore, either because those with privileges refused to allow any further contributions or because those without them already found it difficult to bear the existing level of taxation.
Simply put, the privileged class put up furious resistance to taxation and simply refused to pay their share and the poor or middle-class could not. The French Treasury was in dire straits. The Seven Years' War had nearly bankrupted the nation. It was only the beginning of the end. In fact, the signs of dysfunction were evident for decades before they finally led the nation to disaster.
The year 1778 saw French armies locked in a battle with the British in defense of the American colonies. The war, like the others, was yet another costly drain on a mismanaged and over-extended Treasury.

Disastrous Policies and Government of Aristocrats
The government, which might have resolved the financial problems, had also failed. Their legislative solutions, according to Aftalion, "inevitably led to a deepening financial and economic crisis, and to increasingly radical and disastrous policies."
One problem was that the members of the French Parliament were also members of the aristocratic elite and had long become, as one writer says, "a mere scheme for aristocratic government."
The Parliament members  made no pretense to represent all of the people. they had, as Aftalion observes, 
"bought their offices and were not much concerned to defend the interests of the general public but merely those of their own order. Since the venal nature of their offices shielded them.. they were able systematically to oppose all egalitarian fiscal reforms and more generally any challenge to their privileges."
Throughout this time of desperation, the aristocracy lived a life of careless elegance. At the same time, the poor majority barely had enough to sustain themselves. As one contemporary historian with a vinegary humor wrote in 1789:
"A spirit of fellowship leads the nobles to favor one another over the rest of the nation”
Meanwhile, an endless series of complicated fiscal games were constantly being played to balance the budget but even those were only satisfactory in the short term. Reforms were discussed and for one reason or another they were rejected. The names might have changed, the solution put forward may have changed but the situation did not.
All it needed was a spark. 

Nature Takes a Hand
That spark came about as the climate in the region changed. Some scientists believe it was related to Icelandic volcanoes. Years of bad harvests were a result of poor agricultural policies. As one  source explains:
Crop failure, harsh winters and famine led to high prices of bread, which was the main source of nutrition for poor peasants and an increased death toll. The government's failure to help its citizens while enjoying privileges by the way of increased taxes angered many peasants. This anger fueled their need to overpower and get rid of social inequity and put an end to the food shortage. Economic and agricultural problems, combined, evolved into a central cause of the French Revolution.
For the nobles and aristocrats there was no problem but the miserable conditions had left the populace of major urban areas without even the most rudimentary forms of nutrition. (That famine and bread riots provoked the famous phrase incorrectly attributed to Marie Antoinette, wife of Louis XVI and queen of France: "Let them eat cake" The phrase came to symbolize the flippancy of aristocratic elite had for the hardship of the masses.)

Riots grew more and more common, more and more violent in Paris and other areas. By 1789, radicals were calling upon the people to take up arms against the ruling class. Around 50,000 citizens arm themselves with pikes and formed a kind of people's army. This led in July of that year, to the storming of the Bastille.

In short order, the revolution had begun. Things began to break down rather quickly after that. More food riots in 1791 as French society was fractured into partisan groups.
In March 1792,  the guillotine  adopted as official means of execution. It made things a lot speedier because a lot of people had a lot of scores to settle. In the following year, the King and the royal family were tried and by summer, executed.
Eventually, when the leaders of the revolution ran out of aristocrats who had not fled the country, they started on one another. This bloody chaos went on for years until a dictator seized power and declared himself Emperor of the French people.



Between these two history lessons, I think it is pretty clear which offers more similarities to our time. I doubt Perkins would admit it, though. The French aristocrats had plenty of time - decades- to balance the system. Instead they fought- every step of the way- any chance of meaningful reform. In doing so they made a contracted civil war and a revolution all but inevitable.

This exploration of European history is not meant to be a threat but it could serve to warn people like Tom Perkins. This is what happens when problems of inequality are allowed to fester, when those with wealth choose to ignore the rest of society and play the role of victim.


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