Mitt Romney's former Bain Capital partner and current high-stakes donor Edward Conard wants all of us 99 percenters to know we've got it all wrong. If we really understood the economy, we'd be grateful that wealth is concentrated with the
May 3, 2012

unintended consequences book cover
Mitt Romney's former Bain Capital partner and current high-stakes donor Edward Conard wants all of us 99 percenters to know we've got it all wrong. If we really understood the economy, we'd be grateful that wealth is concentrated with the wealthiest .01 percent of the 1 percent, and we'd work really hard to double their wealth because it would be good for all of us.

Not only does he believe this, he's written a book about it, due to come out next month. I've already written to see if I can get a review copy of it, because I just cannot pass up such an exercise in self-adulation. In the meantime, Conard sat down for an interview with New York Times reporter Adam Davidson. His brazen responses to Davidson's questions reveal the extraordinary thought process of the investor class, who have become so incredibly removed from reality that they actually believe this stuff.

Take, for example, his assertion that doubling the wealth of the wealthy is really good for the rest of us. His argument goes like this:

Conard picked up a soda can and pointed to the way the can’s side bent inward at the top. “I worked with the company that makes the machine that tapers that can,” he told me. That little taper allows manufacturers to make the same size can with a tiny bit less aluminum. “It saves a fraction of a penny on every can,” he said. “There are a lot of soda cans in the world. That means the economy can produce more cans with the same amount of resources. It makes every American who buys a soda can a little bit richer because their paycheck buys more.”

It might be hard to get excited about milligrams of aluminum, but Conard says that we live longer, healthier and richer lives because of countless microimprovements like that one. The people looking for them, Conard likes to point out, are not only computer programmers, engineers and scientists. They are also wealthy investors like him, who are willing to risk their own money to finance improvements that may or may not work. There is a huge mechanism constantly trying to seek out and support these new ideas — entrepreneurs, multinationals and, crucially for Conard, investment firms and hedge funds and everyone down to individual bond traders.

And yet. I see an economy with trillions on the sidelines and wonder what a few more trillion dollars will do for the economy. What can be done with 4 trillion dollars squirreled away that can't be done with 2 trillion, after all? He doesn't seem to have much of an answer for that, but he's certainly willing to look down his nose at art history majors.

A central problem with the U.S. economy, he told me, is finding a way to get more people to look for solutions despite these terrible odds of success. Conard’s solution is simple. Society benefits if the successful risk takers get a lot of money. For proof, he looks to the market. At a nearby table we saw three young people with plaid shirts and floppy hair. For all we know, they may have been plotting the next generation’s Twitter, but Conard felt sure they were merely lounging on the sidelines. “What are they doing, sitting here, having a coffee at 2:30?” he asked. “I’m sure those guys are college-educated.” Conard, who occasionally flashed a mean streak during our talks, started calling the group “art-history majors,” his derisive term for pretty much anyone who was lucky enough to be born with the talent and opportunity to join the risk-taking, innovation-hunting mechanism but who chose instead a less competitive life. In Conard’s mind, this includes, surprisingly, people like lawyers, who opt for stable professions that don’t maximize their wealth-creating potential. He said the only way to persuade these “art-history majors” to join the fiercely competitive economic mechanism is to tempt them with extraordinary payoffs.

There's much, much more, but this last paragraph more or less turned me off to anything more he may have had to say. This writer is someone who writes, who reads, and who doesn't need to be fabulously wealthy to figure out solutions to her own little problems, like how to keep the pug from chewing the legs on the table or even how to pay for her daughter's college education. Conard, like so many wealthy people, assumes everyone on the planet wants to be wealthy and those who don't are really just a drag on the rest of society. Or, as Digby says, his message is really "f*ck you, you little art history parasite."

Some of us want to be content. Some of us want to live a peaceful life in harmony with our neighbors and our environment, making whatever small contribution to our communities we can. Some of us are artists, and musicians, and writers and people who make the landscape something more interesting than just the bland business suits running up and down the elevators like rats on a cage wheel.

We are not all destined to be moguls and magnates. By the same token, one doesn't have to be a mogul to contribute to society. The teachers, firefighters, police, file clerks and insurance agents in this world maybe don't care if they have millions. They just want the ability to have a home, a family, and an opportunity to live without wondering what fealty they must pay to the world's wealthiest in order to live a simple, quiet life. As Davidson points out, this is a paradigm Conard does not understand.

The world Conard describes too often feels grim and soulless, one in which art and romance and the nonremunerative satisfactions of a simpler life are invisible. And that, I realized, really is Conard’s world. “God didn’t create the universe so that talented people would be happy,” he said. “It’s not beautiful. It’s hard work. It’s responsibility and deadlines, working till 11 o’clock at night when you want to watch your baby and be with your wife. It’s not serenity and beauty.”

Oh, by the way. The whole reason for the financial meltdown in 2007 and 2008? Our fault. The fault of the 99 percent. If we were smart like Conard and Romney, well, there wouldn't have been a problem. Seriously, he believes this.

In 2008 it was large pension funds, insurance companies and other huge institutional investors that withdrew in panic. Conard argues in retrospect that it was these withdrawals that led to the crisis — not, as so many others have argued, an orgy of irresponsible lending. He points to the fact that, according to the Financial Crisis Inquiry Commission, banks lost $320 billion through mortgage-backed securities, but withdrawals disproportionately amounted to five times that. This stance, which largely absolves the banks, is not shared by many analysts. Regardless, Conard told me: “The banks did what we wanted them to do. They put short-term money back into the economy. What they didn’t expect is that depositors would withdraw their money, because they hadn’t withdrawn their money en masse since 1929.

Gee, and here I thought it was the frozen credit markets that finally precipitated the meltdown. Heck, if there was a run on the banks, why is it that my 401k took such a hit? Why did the government and the fed have to pump trillions of cash into the system to keep it from a total meltdown? Hey, friends, these questions aren't ours to answer in Conard's world, because it was just the little "art history majors" peeing their pants and putting runs on the banks.

Davidson predicts that Conard's book may be the most hated one of 2012. On the contrary, I see it as a revelatory work which should tell voters throughout this country exactly what Mitt Romney and his fellow Bain overlords think of us. To their philosophy and unbridled greed, I reply in Digby-esque fashion, "F*ck you, you Randian robots."

One final thought on this. When the economy melted down, a close relative of mine made his living managing small investment accounts for elderly people in an ethical, honest fashion. About two months into the meltdown he remarked that he thought he was playing by the rules, only to discover there were no rules. It was that moment that illuminated just how greedy and immoral these people are. When do they decide they've got enough? When they have 90 percent of the wealth? 95 percent? Is there some point where they've got whatever they think is enough?

No, I didn't think so.

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