THE TROUBLE WITH BILLIONARES

LINDA MCQUAIG
interviewed by

SHAWN CONNER

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Shawn Conner is a freelance writer whose work has appeared in the Globe and Mail, BC Business, the Comics Journal and Lavalife.com. He currently spends most of his time editing and publishing the arts and culture website Guttersnipe.

PREAMBLE
Under Eisenhower, the tax rate for the rich was 91%. It's now 35%. Those of us in the 99.86 percentile of the population who aren’t among the richest may never give thought as to whether billionaires deserve their wealth. Linda McQuaig asks that question in her new book The Trouble with Billionaires (Viking Canada, 2010). The journalist, for whom the term “muckraking” seems to have been invented, borrows a concept – to present the distribution of income as a national parade in which everyone marches in order of height – from Dutch statistician Jan Pen that puts the wealth of these relatively few individuals in terms we might be able to grasp. She then asks whether these people truly deserve their fortunes, how these vast amounts of wealth came to be and why this has wreaked havoc with the world economy.
The Trouble with Billionaires (written with tax law professor Neil Brooks) is a provocative book; anyone to the left of Glenn Beck will probably want to become an anarchist five chapters in. We talked to McQuaig, whose other books include It’s the Crude, Dude (how oil affects foreign policy) and Holding the Bully’s Coat (the Canadian government’s sycophantic relationship with the U.S.) in Toronto about our casino economy, why no one wants to ask these questions, and why hedge-fund trader John Paulson is walking around a free man – and a billionaire.

SHAWN CONNER: What do you think of the state of political discourse, particularly in the U.S.?

LINDA MCQUAIG: It’s a mixed bag, some of it excellent, some of it not. I don’t know too much about Fox News except what I’ve see on the Jon Stewart show, but judging from that, I’d say the level of discourse is appallingly bad.

There’s no serious debate in the U.S. about the Middle East, about Israel and the Palestinians; that subject is never treated with any seriousness. And there’s no serious debate about U.S. military involvement abroad, about whether there’s any legitimacy to being in Iraq or Afghanistan in the first place.

In terms of economic issues, there’s been a lot of debate over Obama’s attempt to raise the tax rate on people with income over $250,000, though it never gets beyond the superficial level. Our book asks if there any justification for these huge incomes at the top. And do the rich deserve their vast fortunes. And why are these assumptions never questioned.

SHAWN CONNER: It’s as if we’ve been collectively brainwashed into believing you deserve anything you can get.

LINDA MCQUAIG: The assumption is that whatever the so-called market has given you – and, as we point out in the book, the market is just a creation of the state – is deemed to be utterly fair and just. That’s a huge, huge assumption which is never challenged in the media.

Most people, if they thought about it, would conclude there is something intrinsically unjust or wrong or unappealing about the idea of, let’s say, some guy working in derivatives trading and who is making tens of thousands of dollars more than a nurse. It’s just hard to imagine the argument, if someone was forced to make it, how that derivatives trader – who by the way risks bringing the whole financial system down, as we’ve seen recently – how that person is contributing tens of thousands of times more to society than a nurse. It boggles the mind. It defies credulity. So better not to get into the subject.

I don’t want to be too dogmatic and suggest there’s total control of the media, but the mainstream media has a striking amount of similarity within it. If you get into the corners of the media, the margins, you get all kinds of interesting things. But if you stick with the very mainstream, there’s a mainstream narrative out there that is heavily influenced by those in power. You get the odd deviations here and there, but by and large the message is so overwhelming and constant and ubiquitous that people without thinking go, “Yeah, people shouldn’t have to give up their money to taxes, they earned it.” They don’t really think through – “How did they earn it? How did they come to earn so much more than anybody else?”

SHAWN CONNER: Where is the interest in the book coming from – the corners?

LINDA MCQUAIG: I think it’s fair to say there’s a lot of interest in the corners. I have always made a point of trying to be in the mainstream media. I’ve worked at the Globe, the Star, the CBC, the Montreal Gazette, as a reporter, producer, various things. And now I’m a columnist, I’ve been one for over ten years now. I feel like I’m in the mainstream, and in fairness I do get some attention from the mainstream. At the same time, let me put it this way – I don’t think the mainstream media has given the themes of this book the attention they warrant.

SHAWN CONNER: Seeing that this book will probably automatically be labeled left-wing, is it indicative of where we’re at as a society, since the questions are logical and non-partisan?

LINDA MCQUAIG: I think that’s true. There’s only been one mainstream review of the book, as far as I’m aware, and it was in the Toronto Star business section, which is the wrong place because they’re automatically hostile to it. All they do is attack the arguments and make it sound like it’s a left-wing diatribe against business.

I think we’re just raising logical questions. It’s not a big lefty book; we’re simply holding up, as examples, of things that work(ed) much better -- a lot of hearkening back to the early post-war years in Canada and the U.S. In the pre-1980s, there was a much more egalitarian distribution of income, higher taxes on the rich and more financial regulation. And it worked much better and it was under a capitalist system. We are asking why is it that the remuneration those at the top received back then seemed to work, seemed to produce effective incentives, and why can’t that work now? And how does that constitute a radical socialist agenda?

SHAWN CONNER: While researching this book, I assume you unearthed some stories you weren’t familiar with. Does anything stand out as particularly outrageous – I’m thinking of that Paulson guy.

LINDA MCQUAIG. The U.S. government originally was looking into charges against Goldman Sachs in connection with John Paulson, who knowingly soft-peddled subprime mortgages to the vulnerable, to those who couldn’t afford lawyers to explain to them the contract, what the fine print means, who got in way over their heads and lost their homes they shouldn’t have been allowed to purchase. Last April the government finally laid charges and it looked like they might even go after Paulson because he was part of the scam, but they’ve backed off completely, which is infuriating, especially when you consider the magnitude of the destruction they (Paulson and Angelo Mozilo from Countrywide Financial) wrought. Wall Street’s just walked away from everything.

What Paulson did was bundle together mortgages that were likely to fail and then took out insurance betting they were going to fail. It’s like playing in a rigged casino which the system allowed. And now we’re massively in debt and we can’t rebuild our healthcare and education systems.

 

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