The Rich Crave Release From Their Shackles!
Let us now praise the symbolic analysts. It’s been a wild, statist year since CNBC’s shouty market populist Rick Santelli summoned the might of the tirelessly affronted, fathomlessly entitled Tea Party Nation into being with his prophetic denunciations of outsized SUVs and rehabbed bathrooms from the trading floor of the Chicago Mercantile Exchange. And amid all the fresh defilements of free-market virtue kicked up in each passing news cycle, it’s been all too easy to lose track of the bigger picture. So comes now Ziad K. Abeldour, CEO of the Blackhawk Partners private equity group, to hymn the tragic misunderstood lot of the wealth creator.
After all, Abeldour insists, “the economic future of the poor-and our nation-will be determined in the coming decades by how we treat the people in this country who create great wealth.” And if you think our privileged castes are snooty and exclusive, well, think again! “A great number of the richest among us never finished high school, and many who went to college never managed to graduate. That’s because the rich in this country are chosen not by blood, credentials, education, or services to the establishment. The rich are chosen for performance, and for their relentless desire to serve consumers.” What’s more, Abdenour continues in a rising crescendo of cultural self-congratulation, “because these men and women often overthrow rather than undergird establishments, the richest among us usually begin as rebels and outsiders. Often they live in places like Bentonville, Ark.; Omaha; or Mission Hills, Kans.; mentioned in New York chiefly as the butt of a comedy routine.”
Yes, there’s an establishment-defying meritocracy in them there hills! How did we ever come by the misguided notion that wealth is anything but a great elixir of opportunity, following the lodestar of consumer demand just as reliably as, well, Abdenour flies over Omaha and Mission Hills as he shuttles between his own spreads in Manhattan and Beverly Hills?
Is it the work of economist Edward Wolff, which projects that that median wealth in our land of opportunity plummeted a harrowing 36 percent between 2007 and 2009? Is it the international research showing that the United States has the highest concentration of wealth at the top tiers of its social order among all Western democracies except the bankers’ paradise known as Switzerland?
Or the inconvenient truth that family income, not individual pluck and consumer-pleasing derring-do, is the greatest determinant of economic lifetimes, according to the most reliable empirical data on the subject?
Well, of course not! We don’t grasp the true magic of ever-expanding, downward-trickling riches because of that perverse socialist thing that liberals keep foisting on the risk-intoxicated frontiersman, hewing his great fortune out of the good earth. “As Mitterrand’s French technocrats found early in the 1980s,” Abeldour ominously intones, “the proud new socialist owners of complex systems of wealth soon learn they are administering an industrial corpse rather than a growing corporation.” Fortunately, the vitalist, world-bestriding spirit of true wealth always unshackles itself from all such surly bonds. “It betrays every person who seeks to redistribute wealth by coercion. It balks every socialist revolutionary who imagines that by seizing the so-called means of production he can capture the crucial capital of an economy.” Because let us never forget: “Capitalist means of production are not land, labor, or capital but minds and hearts.”
It therefore only stands to reason that “if the majority of Americans smear, harass, overtax, and over regulate this minority of wealth creators, our politicians will be shocked and horrified to discover how swiftly the physical tokens of the means of production collapse into so much corroded wire, eroding concrete, and scrap metal. They will be amazed at how quickly the wealth of America is either destroyed, or flees to other countries.”
Its tempting, of course, to dismiss this, um, expansive metaphysical vision, whereby wealth is at once fetchingly mystic in its composition and so prodigally powerful that a mere sideswipe from the meddling visible hand of the state can spur it to lay a once powerful nation in corroded ruin, as garden variety psychosis. But this is the Internet Age, after all, and Abdelnour’s cri de coeur has caromed around right-leaning political and investment sites as an unvarnished account of the Way Things Really Ought to Be.
So to bracket the plainly delusive bit about the America plutocracy being under cultural siege, let’s begin with the basics: With what sort of consumer demand does Abdelnour’s Blackhawk Partners concern tremble in Swedenborgian harmony? Well, it’s a funny thing. Blackhawk is a private equity firm-the kind of house that typically picks up established corporate brands with massively leveraged debt, realizing profits on the variable interest rates floated in the deal. Companies acquired in this fashion can realize some efficiencies that bolster their market standing-more often, though, they emerge saddled with new and copious debts of their own, causing market shares to shrink, jobs to contract, and all the swashbuckling risk involved in the original takeover to migrate down the economic food chain, decimating the value of pension plans, benefits packages, union contracts and the like. Not much is really produced in these transactions, and their watchword is less the bold handiwork of an entrepreneur than the rubber stamp of a credit-rating agency.
Still, Abdelnour can claim a unique pedigree in the business, having toiled five years as a trusted aide de camp of 80s junk bond king Michael Milken at Drexel Burnham Lambert, before the feds convicted Milken on racketeering and securities fraud charges. Come the 90s, Abdelnour founded Blackhawk with several Drexel vets, and made a killing on leveraged Internet deals but-ever mindful of the mandate to meet consumer demand most nimbly-shifted over to oil trading, “whose proceeds are invested in companies providing security products to address the war on terror,” as Arab-American Business decorously noted.
That sensitive sideline is presumably why the firm’s commodity trading division, known familiarly as “Black Ops,” includes a former CIA agent and KGB hand, together with “an associate from about every major oil company,” as the Wall Street Oasis blog notes. “Unlike any other Firm on the Planet,” the Blackhawk group’s promotional materials announce, “and because of the highly sensitive nature of some of the Projects we deal with on a global basis and the identity of some of our 22 family office very keen on privacy, Blackhawk Partners is run by two separate teams; one known to the public and the other operating behind the scene.”
Suddenly the investment world seems a lot less riotously democratic, somehow. Nor, for that matter, does Abdelnour’s other sideline — promoting a U.S. invasion of his native Lebanon, first via the U.S. Committee for a Free Lebanon and then via the funding of Daniel Pipes’ Middle East Forum, a great clearing house of neoconservative cant concerning the Arab world — really recommend itself as an example of the demotic spirit of wealth arrayed against a clueless establishment. Not that Abdelnour really needed the Pipes project to boost his stature in neocon circles-the Free Lebanon committee alone boasts such punchdrunk, bomb-now-and-rationalize-later jingoes as Elliott Abrams, Michael Ledeen, Bill Kristol, Frank Gaffney and Douglas Feith. You’d think someone keeping that kind of company would be a little more careful about characterizing the true inner essence of capitalism an affair of hearts and minds.
Of course, one supposes that a truly free market permits those who administer its blessings to channel cash and lobbying clout in support of the foreign invasion of one’s choice-talk about your global competition! But at the very least, Abdelnour’s dalliance with the merchants of regime change points up that even Randian individualists feel compelled to avail themselves of the hated instruments of state power now and then (to say nothing of the government contracts associated with the war on terror’s security portfolio). And that being the case, why is a less punitively unequal social order-or even a system of stouter labor representation, or wage and income supports-such an unthinkable violation of the social contract, by comparison? Oh, wait-that’s right, because we are dealing with cosmic first things here.:
Volatile and shifting ideas, and the human beings behind them — not heavy and entrenched establishments — are the source of our nation’s wealth. There is no bureaucratic net or tax web that can catch the fleeting thoughts of the greatest entrepreneurs of our past. Or future.
In this mindscape of capitalism, all riches finally fall into the gap between thoughts and things. Governed by mind but caught in matter, an asset must have an income stream that is expected to continue if the asset is to retain its value.
Stand aside and marvel, oh puny acolytes of the social welfare state! We have seen the future, and it is the unmolested income stream of private equity concerns, in all past and future mindscapes here stipulated. Perhaps this will serve as the charter document of Abdelnour’s next lobbying start-up, the U.S. Committee for a Free Ride.
Chris Lehmann really does encourage you to read the Blackhawk “position paper.” It’s crazy!