Top Fund Manager Pours Scorn on the Grab-all Superearners at the top of the US Economic Pyramid
|Source: PIMCO Bonds|
An FT/Harris poll published on Monday shows that popular backlash against globalisation and the leaders of the world's largest companies is sweeping all rich countries.
Large majorities of people in the US and across Europe want higher taxation for the rich to counter a widespread belief that rewards are unjustified.
Supporting the view that globalisation is an overwhelmingly negative force, citizens of rich countries are looking to government to cushion the blows they perceive have come from the
liberalisation of their economies to trade with emerging countries.
US chief executive officers are regarded as unethical and overpaid, according to most Americans surveyed in a Bloomberg/LA Times poll in June.
More than six in 10 people surveyed say CEOs are ``not too ethical'' or ``not ethical at all,'' versus 33% who call them ``mostly ethical.''
An overwhelming majority, more than eight in 10, say executives are paid too much. At the same time, Americans remain upbeat about the state of the economy.
Bloomberg News says that lingering antagonism toward the boardroom set could mean that Democrats, who have been leery of being labeled anti- business in the past, may be emboldened in efforts to curb executive compensation and tighten financial regulation.
The House of Representatives in April approved a measure to give shareholders more say on how top executives are paid. A similar bill is working its way through the Senate.
Bill Gross, who runs one of the largest specialty fixed income managers in the world, with more than $687 billion in assets under management and has been termed "the nation's most prominent bond investor" by the New York Times, lets rip in his August newsletter about hedge fund and equity fund managers who currently pay a 15% tax rate on most of their income because fees are treated as capital and not income.
Gross writes: What pretense to assert, as did Kenneth Griffin, recipient last year of more than $1 billion in compensation as manager of the Citadel Investment Group, that "the (current) income distribution has to stand. If the tax became too high, as a matter of principle I would not be working this hard." Right. In the same breath he tells, Louis Uchitelle of The New York Times that the get-rich crowd "soon discover that wealth is not a particularly satisfying outcome." The team at Citadel, he claims, "loves the problems they work on and the challenges inherent to their business."
Oh what a delicate/tangled web we weave sir. Far better to admit, as has Warren Buffett, that the tax rates of the wealthiest Americans average nearly 15% while those of their salaried and therefore less incented assistants just outside their offices are nearly twice that. Far better to recognize, as does Chart 1, that only twice before during the last century has such a high percentage of national income (5%) gone to the top .01% of American families.
So when is enough, enough? Bill Gross asks.
"Now is the time, long overdue in fact, to admit that for the rich, for the mega-rich of this country, that enough is never enough, and it is therefore incumbent upon government to rectify today's imbalances," he says.
US superearners take lion's share of productivity gains