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Home / Business / Billionaires defy Elizabeth Wear's plan to solve America's inequality problem

Billionaires defy Elizabeth Wear's plan to solve America's inequality problem



JPMorgan Chase ( JPM ) Chief Jamie Dimon said this week that Warren is "vilifying successful people" and her plans would change "the complete nature of how to run a company."
Warren is hardly the first presidential candidate to shine on the billionaire class and claim the system is rigged. Donald Trump promoted similar populist appeals and held Goldman Sachs ( GS ) as a symbol of the corrupt establishment, before continuing to hire bank executives to help him. govern the country.

But few thought Trump, backed by a Republican Congress, would actually adopt an anti-business agenda beyond trade policy (and some probably didn't think he really wanted to start a trade war, either.)

Warren, on the other hand, is seen as a potential game changer.

"You suddenly have people who never thought they had to play defense of capitalism get out of the woodwork because they perceive a threat to the system," said Ian Winer, a former hedge fund manager who is now an advisory board member of investment bank Drexel Hamilton .

The billionaire's setback stems from concern over the scale of Wear's efforts to recreate the US economy by raising taxes on the ultra-wealthy.

Warren wants to relax part of the corporate tax cuts in 201
7, impose a 6-cent wealth tax on every dollar with net worth over $ 1 billion, and raise capital gains tax.
The new taxes would help with ambitious programs, including Wear's proposed Medicare-for-All plan and one that would eliminate student debt for millions of Americans and make all public colleges without tuition fees.

The top 1% control $ 34.7 trillion

Her aggressive reforms are aimed at fixing America's very real inequality problem. Warren's campaign, along with that of Bernie Sanders, builds on the idea that the profits disproportionately go to the rich. And that many households do not have access to the same opportunities to achieve the American dream.

The figures support, even after the longest economic expansion in US history.
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Remember that the top 1% of Households now control $ 34.7 trillion of the nation's wealth, according to the Federal Reserve. That's a 611% increase from the $ 4.88 trillion they had in 1989.

Gains have been more subdued for the rest of the country. The bottom 50% of families control only $ 2.08 trillion today, up a more modest 174% from 1989.

Figures that give it the feeling that the American dream is not alive and well.

"The data is not coming back to the dream," Mary Daly, president of the San Francisco Federal Reserve, told CNN's Poppy Harlow this week.

Daly said that the "strong economy" over the last decade has managed to close some of the gaps that exist between rich and poor, but only "a little." She added, "The gaps are still large."

Limited access to education will slow down the economy

Not long ago, the middle class controlled much more of America's wealth than the super-rich. In 1989, the middle class had $ 7.1 trillion, compared to $ 4.7 trillion for the top 1%, according to the Fed.

Today, the middle class has $ 30.73 trillion in assets, while the top 1% share has ballooned to $ 34.7 trillion.

Daly argued that the inequality problems are the result of "structural" barriers in the system, including access to education, which cannot be printed even by a strong economy.

"What scares me on that front is we don't have enough access to things that let people be their best," Daly said. "And that means we're going to limit our growth potential."

Jeffrey Sonnenfeld, a Yale School of Management professor, nevertheless warned that Warren should avoid scapegoating the rich.

"Americans do not have the wrath of great wealth as long as it was not achieved through cheating and stealing," Sonnenfeld said.

Ray Dalio warns the system is "broken"

For his part, Warren pointed out that the backlash from billionaires is proof that the system must be fixed.

"The fact that they have reacted so strongly – so cruelly! – to being asked to chip in more tells you everything you need to know," tweeted . "The system works well for the wealthy and well-connected, and Jamie Dimon doesn't want it to change. I'm going to fight to make sure it works for everyone."

Some billionaires are well aware of problems in the current system.

Cooperman has said that he believes in a progressive income tax and that the rich should pay more.

Dimon told CNN in March that the US economy is "fundamentally anti-poor" and he has led JPMorgan to try to solve these problems by training low-income Americans in future jobs, hiring ex-convicts and investing $ 200 million in Detroit .
Salesforce ( CRM ) Managing Director Marc Benioff recently said "capitalism, as we know it, is dead" and asked for a new version that focuses more on social good .
Ray Dalio, the billionaire hedge fund founder of Bridgewater Associates, acknowledged in a LinkedIn post Tuesday that "the system of making capitalism work well for most people is broken."

That's why Dalio said the world is "approaching" a major paradigm shift. "

Dalio did not define what that shift would look like, so Warren and Cooperman could fix it.


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