Omega Advisors, Inc. 1 Wall Street Plaza • 88 Pine Street • 31 st Floor | New York, New York 10005
Tel: 212-495-5210 | Fax: 212-495-5236
Leon G. Cooperman, C.F.A. Chairman & Chief Executive Officer
OPEN LETTER TO THE PRESIDENT OF THE UNITED STATES OF AMERICA
Tel: 212-495-5210 | Fax: 212-495-5236
Leon G. Cooperman, C.F.A. Chairman & Chief Executive Officer
OPEN LETTER TO THE PRESIDENT OF THE UNITED STATES OF AMERICA
November 28, 2011
President Barack Obama
The White House
1600 Pennsylvania Avenue, NW
Washington, D.C. 20500
"Dear Mr. President,
"It is with a great sense of disappointment that I write this. Like many others, I hoped that your election would bring a salutary change of direction to the country, despite what more than a few feared was an overly aggressive social agenda. And I cannot credibly blame you for the economic mess that you inherited, even if the policy response on your watch has been profligate and largely ineffectual. (You did not, after all, invent TARP.) I understand that when surrounded by cries of 'the end of the world as we know it is nigh', even the strongest of minds may have a tendency to shoot first and aim later in a well-intended effort to stave off the predicted apocalypse.
"But what I can justifiably hold you accountable for is your and your minions' role in setting the tenor of the rancorous debate now roiling us that smacks of what so many have characterized as 'class warfare'. Whether this reflects your principled belief that the eternal divide between the haves and have-nots is at the root of all the evils that afflict our society or just a cynical, populist appeal to his base by a president struggling in the polls is of little importance. What does matter is 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. It is a gulf that is at once counterproductive and freighted with dangerous historical precedents. And it is an approach to governing that owes more to desperate demagoguery than your Administration should feel comfortable with.
"Just to be clear, while I have been richly rewarded by a life of hard work (and a great deal of luck), I was not to-the-manor-born. My father was a plumber who practiced his trade in the South Bronx after he and my mother emigrated from Poland. I was the first member of my family to earn a college degree. I benefited from both a good public education system (P.S. 75, Morris High School and Hunter College, all in the Bronx) and my parents' constant prodding. When I joined Goldman Sachs following graduation from Columbia University's business school, I had no money in the bank, a negative net worth, a National Defense Education Act student loan to repay, and a six-month-old child (not to mention his mother, my wife of now 47 years) to support. I had a successful, near-25-year run at Goldman, which I left 20 years ago to start a private investment firm. As a result of my good fortune, I have been able to give away to those less blessed far more than I have spent on myself and my family over a lifetime, and last year I subscribed to Warren Buffet's Giving Pledge to ensure that my money, properly stewarded, continues to do some good after I'm gone.
"My story is anything but unique. I know many people who are similarly situated, by both humble family history and hard-won accomplishment, whose greatest joy in life is to use their resources to sustain their communities. Some have achieved a level of wealth where philanthropy is no longer a by-product of their work but its primary impetus. This is as it should be. We feel privileged to be in a position to give back, and we do. My parents would have expected nothing less of me.
"I am not, by training or disposition, a policy wonk, polemicist or pamphleteer. I confess admiration for those who, with greater clarity of expression and command of the relevant statistical details, make these same points with more eloquence and authoritativeness than I can hope to muster. For recent examples, I would point you to 'Hunting the Rich' (Leaders, The Economist, September 24, 2011), 'The Divider vs. the Thinker' (Peggy Noonan, The Wall Street Journal, October 29, 2011), 'Wall Street Occupiers Misdirect Anger' (Christine Todd Whitman, Bloomberg, October 31, 2011), and 'Beyond Occupy' (Bill Keller, The New York Times, October 31, 2011) - all, if you haven't read them, making estimable work of the subject.
"But as a taxpaying businessman with a weekly payroll to meet and more than a passing familiarity with the ways of both Wall Street and Washington, I do feel justified in asking you: is the tone of the current debate really constructive? People of differing political persuasions can (and do) reasonably argue about whether, and how high, tax rates should be hiked for upper-income earners; whether the Bush-era tax cuts should be extended or permitted to expire, and for whom; whether various deductions and exclusions under the federal tax code that benefit principally the wealthy and multinational corporations should be curtailed or eliminated; whether unemployment benefits and the payroll tax cut should be extended; whether the burdens of paying for the nation's bloated entitlement programs are being fairly spread around, and whether those programs themselves should be reconfigured in light of current and projected budgetary constraints; whether financial institutions deemed 'too big to fail' should be serially bailed out or broken up first, like an earlier era's trusts, because they pose a systemic risk and their size benefits no one but their owners; whether the solution to what ails us as a nation is an amalgam of more regulation, wealth redistribution, and a greater concentration of power in a central government that has proven no more (I'm being charitable here) adept than the private sector in reining in the excesses that brought us to this pass - the list goes on and on, and the dialectic is admirably American. Even though, as a high-income taxpayer, I might be considered one of its targets, I find this reassessment of so many entrenched economic premises healthy and long overdue. Anyone who could survey today's challenging fiscal landscape, with an un- and underemployment rate of nearly 20 percent and roughly 40 percent of the country on public assistance, and not acknowledge an imperative for change is either heartless, brainless, or running for office on a very parochial agenda. And if I end up paying more taxes as a result, so be it. The alternatives are all worse.
"But what I do find objectionable is the highly politicized idiom in which this debate is being conducted. Now, I am not naive. I understand that in today's America, this is how the business of governing typically gets done - a situation that, given the gravity of our problems, is as deplorable as it is seemingly ineluctable. But as President first and foremost and leader of your party second, you should endeavor to rise above the partisan fray and raise the level of discourse to one that is both more civil and more conciliatory, that seeks collaboration over confrontation. That is what 'leading by example' means to most people.
"Capitalism is not the source of our problems, as an economy or as a society, and capitalists are not the scourge that they are too often made out to be. As a group, we employ many millions of taxpaying people, pay their salaries, provide them with healthcare coverage, start new companies, found new industries, create new products, fill store shelves at Christmas, and keep the wheels of commerce and progress (and indeed of government, by generating the income whose taxation funds it) moving. To frame the debate as one of rich-and-entitled versus poor-and-dispossessed is to both miss the point and further inflame an already incendiary environment. It is also a naked, political pander to some of the basest human emotions - a strategy, as history teaches, that never ends well for anyone but totalitarians and anarchists.
"With due respect, Mr. President, it's time for you to throttle-down the partisan rhetoric and appeal to people's better instincts, not their worst. Rather than assume that the wealthy are a monolithic, selfish and unfeeling lot who must be subjugated by the force of the state, set a tone that encourages people of good will to meet in the middle. When you were a community organizer in Chicago, you learned the art of waging a guerilla campaign against a far superior force. But you've graduated from that milieu and now help to set the agenda for that superior force. You might do well at this point to eschew the polarizing vernacular of political militancy and become the transcendent leader you were elected to be. You are likely to be far more effective, and history is likely to treat you far more kindly for it.
"Sincerely,
"Leon G. Cooperman
Chairman and Chief Executive Officer"
My rebuttal on our behalf
The 99 Percent | Everywhere, USA
Small Business Chief Executive Officer, Accountant, Dishwasher, Truck Driver, Receptionist, Cashier, Customer Service Representative, Tech Support Guru, File Clerk, Soccer Mom, Executive Assistant, Photographer, Medical Billing Specialist, Super Dad, Writer, Machinist, Pharmacist, Teacher, Painter, Gardener, and so on.
November 29, 2011
President Barack Obama
The White House
1600 Pennsylvania Avenue, NW
Washington, D.C. 20500
Dear Mr. President,
It is with a great sense of pride that we write this. Like many others, we believed that your election would bring a salutary change of direction to the country, despite those critics who called you naive, unfit and too inexperienced to lead. We are glad to know that we were right. We do not blame you for the economic mess that you inherited, even if your opposition has taken every opportunity to ensure that any effort to address it has been largely ineffectual. We understand that when surrounded by cries of "This is just a lot of wasteful Washington spending," even the strongest of minds will be hard pressed to effect the kind of sweeping change necessary to stave off the predicted apocalypse.
Unfortunately, in spite of your extraordinary efforts, you are now being held accountable for creating a tenor of rancorous debate that was actually started by your political opponents. You are being held personally responsible for "roiling" us in what Republicans were the first to characterize as "class warfare." We know that this does not reflect on any "principled belief that the eternal divide between the haves and have-nots is at the root of all the evils that afflict our society," nor is it "just a cynical, populist appeal to your base by a president struggling in the polls." Understanding this fact is actually of monumental importance. It matters that the divisive, polarizing tone of your opponents' rhetoric has already cleaved a widening gulf, at this point as much visceral as philosophical, between the downtrodden and the wealthy, who refer to themselves as “those best positioned to help us,” even though we don’t want their “help,” what we want is our fair share of the spoils of our labor, which they have not shared with us in decades.
It matters because if we continue to blame the wrong people — ourselves, or worse, you — we will never be able to successfully put a stop to it. Their tack is at once counterproductive and freighted with dangerous historical precedents. And it is an approach to governing that owes itself to desperate demagoguery that the Republican Party has spent the last 35 years becoming more and more comfortable with and adept at.
Just to be clear, we were not "to-the-manor-born," and have struggled our entire lives to enjoy even a modicum of success and financial stability, only to be rewarded with diminishing savings accounts, homes with no equity, lost retirement accounts and wages that have remained stagnant since 1965. We went to public schools because that was our only option. We are plumbers and carpenters and assembly line workers. We come from all corners of the globe and bring with us a diverse and rich background that serves this country well. We have parents who have prodded us and children we have prodded, too. We have had successful businesses go under because the banks who were "too big to fail" played games with the market, lost big, got bailed out, then refused to lend us any more money so we could no longer meet our payroll.
We may not all have the kind of minds necessary to start private investment firms, but we know how to cut hair, make jewelry, copy edit manuscripts, program computers or groom pets. And in spite of our modest means, we still tithe to our churches, feed the homeless, volunteer at our children's schools, run or walk to help find cures for AIDS or breast cancer or heart disease. And we think it's in pretty bad taste to gloat about our giving. We do it privately, and gladly, even if it hurts, because we all know that as bad as things might be for us, there is always someone who has it worse.
None of us are policy wonks, polemicists or pamphleteers (whatever those things are). We won't try to impress you by using big words in long sentences when we couldn't begin to understand them without a dictionary at hand. But there are others we can direct you to who have written with eloquence and authority on the subject that most needs addressing if we are to survive as something more than a Third World Nation. For recent examples of what we are up against, we point you to: "Subsidies of the Rich & Famous" (A Report by Senator Tom A. Coburn, M.D.; U.S. Senator, Oklahoma, November, 2011), "Wall Street Isn't Winning — It's Cheating" (Matt Taibbi, Rolling Stone, October 25, 2011), "Occupiers Occupied: The Hijacking of the First Amendment" (Robert Reich, November 15, 2011), "The Fascinating History of How Corporations Became "People" — Thanks to Corrupt Courts Working for the 1%" (Joshua Holland, AlterNet, November 23, 2011).
As taxpaying citizens with families to feed and more than a passing interest in righting this capsizing ship, we do feel justified in reminding you that for you to forgo acknowledging the existence of this divide and the destructive policies that have been designed by our legislators over a period of decades to create it, would be entirely irresponsible. We have had far too many presidents who have ignored the ever-increasing disparity in this country to our long-term detriment, not only as individuals, but as a nation. It’s about time someone spoke the truth of what has happened and who, exactly, has caused it, be they Republican or Democrat, whether they like how it makes them look or not.
While it's true that people of differing political persuasions can (and do) reasonably argue about tax rates, the Bush-era tax cuts, various deductions and exclusions, unemployment benefits, payroll tax cuts, entitlement programs, "too big to fail" financial institutions — the list goes on and on — we all know that anyone suggesting that you discuss these issues during a political campaign without acknowledging the elephant in the room would be tantamount to asking you to roll over and play dead. Don’t fall for it.
And while we’re grateful that a small handful of high-income taxpayers find the reassessment of so many entrenched economic premises healthy and long overdue, the vast majority of them are not speaking out, many in hopes that they can skate by without enduring any “harm” as they have with every prior Administration, some who are blatantly rubbing our faces in their superiority, and some, like two former staffers for John Boehner, who are secretly drafting schemes to destroy the populous movement that has finally had its belly full of the wealthy and powerful controlling every corner of a government that is supposed to be “of the people, by the people and for the people,” but that has become “of the lobbyists, by the CEOs, and for the corporations.”
But what we find most objectionable is the highly politicized idiom your opponents have chosen to erroneously charge you with. We have never once heard you lay that charge or use that terminology, and we’re mystified as to how anyone could begin to accuse you of fostering it. Now, we may not be the wealthy elite, but we are not naive. We understand that in today's Congress, this is how Republicans have forced the business of governing to get done — a situation that, given the gravity of our problems, is as deplorable as it is seemingly ineluctable.
But as President first and foremost and leader of your party second, we are impressed that you have clearly endeavored, time and time again, to rise above the partisan fray and raise the level of discourse to one that is both more civil and more conciliatory, that seeks collaboration over confrontation. That is what "leading by example" means, even if many people have heretofore refused to acknowledge that you have attempted to do so.
We know that capitalism itself is not the source of our problems. Big businesses do employ many millions of taxpaying people, pay our salaries, include healthcare coverage as part of our compensation, start new companies, found new industries and create new products. But they are wrong that it is they who fill store shelves at Christmas, and keep the wheels of commerce and progress moving; it's those who labor for them who accomplish those tasks, something that the wealthy elite all too readily overlook. And unfortunately those same big businesses have bought enough of our legislators that their share of the taxation burden (or lack thereof) to keep our government running at all, let alone efficiently, has dwindled, generating a smaller and smaller share of the revenue it takes to run it. To not frame the debate as one of "those who have taken and kept the bulk of the nation’s wealth" versus "those whose wealth has been decimated over the past several generations by reverse Robin Hood-style legislation," is to both let down the populace and further inflame an already outraged citizenry.
Do not listen to those who would accuse you of naked, political pandering. That would be the long-used methods of the opposition, who play to some of the basest human emotions, not the least of which are fear and hatred — a strategy, as history teaches, that never ends well for anyone but totalitarians, which is what we’ve become convinced they want to be. Do not allow them to project their own shortcomings onto you.
With all the respect we can muster, Mr. President, it's about time we had a president willing to throttle-up the rhetoric of The People. We don’t assume that the wealthy are a monolithic, selfish and an unfeeling lot who must be subjugated by the force of the state, but we know that enough of them hold enough sway with our government that we must do something now, before it’s too late, to wrest the power away from them and return it to the people where it belongs. And saying so does not make you guilty of the ridiculous charges laid at your feet by people who are very clearly opposed to your presidency and who would like nothing more than to see you defeated. Make no mistake, Mr. President, these men are not your friends and they do not come to you with their advice out of good will. They are wolves in sheep’s clothing who are crass enough to attempt to play on your good conscience.
You know you are the same man who led communities out of poverty and into self-sufficiency in Chicago. And we know you are still that same man, no matter which side of the “force” you’re representing, because we have seen that man create and implement a health care system that is broader and fairer than this country has ever had. We watched you calmly and effectively negotiate a budget deal that kept our country from defaulting on our obligations. We’ve seen how you have championed women’s rights with the Lily Ledbetter Fair Pay Act, and gay rights with the repeal of Don’t Ask, Don’t Tell. You have been the most effective president this country has seen since the 1960s, signing over 500 pieces of legislation into law in the first two years of your first term alone. History will show you to have been a man of courage and fortitude. Of principles and grace.
Do not let the naysayers get you down. We are not your "minions" and we resent being called that by people pretending to ask for a higher level of discourse yet resorting to partisan slams of their own. Please continue to fight for us, Mr. President. We need you now more than ever.
Sincerely,
The 99 Percent
UPDATE, November 30, 2011: It has come to my attention that CNBC gave Mr. Cooperman free air time to read his rebuke of President Obama aloud on the air. Without equal time for the counter argument, this is an unconscionable breach of journalistic ethics. So I'm challenging CNBC to read this letter on air, as well.
If you agree, please contact CNBC (select Show Feedback - CNBC TV as the subject) and ask that they give equal air time to this rebuttal.
Thank you.
UPDATE, December 7, 2011: Thanks to a great comment posted below by JSM1963, I found the video of Cooperman on CNBC.
Though it appears to no longer be available as of January 2017, this is a transcript, taken when it was still viewable, of how it ends:
Cooperman: "We all want to see the country move ahead and do well. And we all want to support the president, we're just hoping to get him around a little bit more to our agenda." CNBC Host: "Understood. We'll talk to you again soon. ... Comment Dennis? Dennis Gartman, Co-Host: "Well, first of all, what an honor to have Leon Cooperman in front of me — amazing guy. On balance I think what he said is absolutely something that needed to be said, I think he's done the right thing by sending that letter to the president."
▶ Please visit The 99% Action Center and start lobbying your representatives in Congress to get to work on the kind of legislation we need to get this country on the right track. ▶ You may also like Obama Draws Ire of Billionaire Leon Cooperman (Not Satire) ~ By Steve Weinstein at Crooks & Liars ▶ Mr. Cooperman's smack-down has been reprinted all over the internet. Please consider reposting this rebuttal to your own blog. Thank you very much. ▶ Please also follow this link to Reddit and vote this post up there. Thanks!
"How wonderful it is that nobody need wait a single moment before starting to improve the world." ~ Anne Frank
Bravo!
ReplyDeleteThank you.
ReplyDeleteThank you for putting into words, the emotions that so many of us are feeling.
I contacted CNBC for their unscrupulous behavior, and I'm sharing this, far & wide.
Outstanding letter. I contacted CNBC and am sharing as well.
ReplyDeleteThank you, everyone!
ReplyDeleteJill, you can speak for me anytime you want, fantastic letter.
ReplyDeleteJill, the 1% will stop at nothing to push the economic imbalance even further down the road their Neo-feudalist paradise.
ReplyDeleteI will reference your excellent rebuttal.
Thank you so much, Claudia and Gene! We have to stand strongly together and drown out the idiocy that has plagued our nation's politics for far too long now. I really appreciate you sharing this blog.
ReplyDeleteThanks for your thoughtful reply to Mr. Cooperman's reality-defying arrogance. The culture of the wealthy is the Achilles' Heel of every civilization. When it goes rotten it destroys its host civilization, and it is very prone to going rotten. Wealth confers both power over other people and the temptation to abuse that power. We live in a time when the culture of wealth, and most especially the culture of corporate governance, has gone very rotten. Too many fervently believe the insanity that their untrammeled greed, destroying everyone in their path, is society's loftiest value, as opposed to an honorable ambition where one seeks profit by helping people. Mr. Cooperman and his peers are blind to the fact they are following in the footsteps of the most failed plutocracies in history, such as the 18th century French aristocracy and the early 20th century Russian aristocracy and capitalist class. They fail to see the philosophies they espouse have been espoused before under different names and failed completely. Before Ayn Rand there was the Nietzschean Ubermensch cult, Social Darwinism, George Fitzhugh and Joseph De Maistre, to name a few. They insist on treating the rest of humanity as cattle whose highest purpose is feeding their greed.
ReplyDeleteGreat rebuttal. My only disagreement is that CNBC breached journalistic ethics by not giving equal time. There's actually no ethical obligation for that. Otherwise we would have half a newspaper page with Obama news and another half with equal coverage of his opposition - regardless of it's news worthiness. I didn't see the interview, but I would say that it would have breached journalistic ethics if the interviewer didn't challenge him on some of his points. Like Fox News® does.
ReplyDeleteThanks so much for your reply, Marcella. Thankfully not all of them are as venal as Cooperman. Read this Op-Ed by Nick Hanauer in Bloomberg from the other day:
ReplyDeleteRaise Taxes on Rich to Reward True Job Creators
JSM, thank you for reminding everyone that there is a lack of journalistic ethics required in airing a balanced view. I do recognize that it's not legally required (nor should it be). But I hope you'll agree that the methods of Fox are reprehensible and that we should call out our media to have higher journalistic standards than they do at this moment in time.
Judge for yourself about this particular case. Here's the video:
CNBC video interview with Leon Cooperman.
The interview starts about about the 1:15 mark. Note the head shaking in affirmation by the host throughout the entire interview. The interviewer asks if Cooperman doesn't acknowledge that the rancor comes from "both sides," then goads Cooperman to call the president out as being "anti-capitalism." And that's about all the questioning the guy did on the Obama letter portion of the interview.
Then this is how the segment ended:
Cooperman: "We all want to see the country move ahead and do well. And we all want to support the president, we're just hoping to get him around a little bit more to our agenda."
CNBC Host: "Understood. We'll talk to you again soon. ... Comment Dennis?:
Dennis Gartman, Co-Host: "Well, first of all, what an honor to have Leon Cooperman in front of me — amazing guy. On balance I think what he said is absolutely something that needed to be said, I think he's done the right thing by sending that letter to the president."
Never — not once — did any of those CNBC guys even remotely challenge Cooperman on a single thing. He was just given a free forum to air his opinion as if it were of any value just because he's a billionaire hedge fund manager.
You and I both know they would never in a million years invite someone who had been manipulated and ripped off by the big boys on Wall Street to air their perspective.
I think it's unconscionable.
But I am truly glad that you made the point you did. I'm actually going to use the video in an update on this post.
Thanks for posting!