Charlie Munger is one of the world’s richest men, a partner to Warren Buffet in Berkshire-Hathaway, which was a major recipient of taxpayers’ generosity in the bailout.
So it’s no surprise that Munger recently told a crowd at the University of Michigan: “Thank God for the bailout.”
Having come through the financial collapse unscathed, Munger went on to offer some advice to those less fortunate than himself, who are suffering in distress without the benefit of much federal help.
Munger sees a sharp distinction between the necessity of bailing out the wealthy, like himself, and everybody else.
“Now, if you talk about bailouts for everybody else, there comes a place where if you just start bailing out all the individuals instead of telling them to adapt, the culture dies,” he continued.
The bailouts were required to save America, according to Munger, but bailing out Americans who aren’t bankers would have been a big mistake.
“There’s danger in just shoveling out money to people who say, ‘My life is a little harder than it used to be,'” Munger said. “At a certain place you’ve got to say to the people, ‘Suck it in and cope, buddy. Suck it in and cope.'”
Munger, at 86, is probably not as comfortable navigating the vernacular as he is the corridors of power, probably meant, “suck it up.”
Full disclosure: I worked for a newspaper of which Munger, who also founded Los Angeles-based mega law firm Munger Tolles & Olson, was a primary owner. I had plenty of opportunity to watch his philosophy in action.
His view of the workplace and his employees seemed to be shaped by a close reading of Charles Dickens, not so much as social critique but as a how to manual.
Dickens is especially relevant with a new report about all of the people who will need to be “sucking it in” – 1 in 7 Americans now live in poverty, according to a report issued last week by the Census Bureau. That’s the highest level in 15 years. Four million more people descended poverty in 2009. Especially hard hit are children: one 1 in 5 in the U.S. now live below the poverty line.
Suck it in, kids.
Another recent outburst from a member of the nation’s uber-rich shows that Munger is not alone in his self-righteous entitlement. Steve Schwartzman, billionaire head of one of the nation’s largest and most successful hedge funds, Blackstone Group, recently compared President Obama’s proposal to let the Bush tax cuts for the wealthiest Americans expire to the Nazi invasion of Poland in 1939. “It’s a war,” Schwartzman said.
He didn’t elaborate on the metaphor, but as I understand his perverse analogy, he’s comparing the president to the Nazis and the nation’s rich to Poles, who thought they were safe, because they had negotiated a peace treaty with the Reich. Hitler’s Army invaded anyway.
Apparently Schwartzman believed that he and Wall Street had a deal with Obama that he would go easy on them. After all, the administration did oppose the toughest proposals for financial reform, instead leading the effort to pass a timid tinkering that doesn’t limit Wall Street’s risky behavior or offer enough public protection from its excesses. So Obama suggesting that the Bush tax cuts should expire would amount to a giant betrayal.
Schwartzman later apologized, but it’s breathtaking that a person – especially one of such prominence and presumed sophistication – not only sees the world in such distorted terms, but feels OK about saying so.
Munger and Schwartzman’s comments reflect not only their profound sense of entitlement, but just how far the nation’s most wealthy and powerful have gone in their war on the middle class.
Men like Munger and Schwartzman have not—at least in the recent past—felt the need to vent their contempt for those who don’t share their advantages. Instead, they would negotiate and lobby for deregulation behind closed doors, and when their investments went south, scare the taxpayers into bailing them out.
What’s striking now is their bold frankness. In the wake of this financial collapse and bailout, which strengthened them while crushing ordinary folks, Munger and Schwartzman aren’t afraid to come out from behind the closed doors of the boardroom and strut their stuff.