Self-made billionaire Leon Cooperman sent a straightforward and scathing letter to President Obama Monday.
Amidst the Occupy Wall Street movement, Capitol Hill's super committee flop, and the 2012 presidential election's focus on the debt and tax reform, the United States is struggling to find a successful solution to economic woes and political failures. Cooperman contributed his opinion to the mix in an open letter calling for reform and more accountability from President Obama.
In the letter, Cooperman outlines a number of grievances with the Obama administration. He criticizes Obama for dividing the country and promoting class warfare as a political strategy. He also claims a willingness to pay more taxes and supports productive policy debates in Congress; however, he demands Obama leads the nation and his party, rather than "pandering" to certain interest groups.
Cooperman is currently the CEO and Chairman of Omega Advisors. He worked as a banker at Goldman Sachs for 25 years before becoming CEO of Goldmans Sachs Asset Managment. He founded Omega Advisors in 1991. Cooperman was born to a plumber in the South Bronx, but now has an estimated net workth of $1.8 billion. Cooperman and his wife are signators of the philanthropic, Giving Pledge.
Full text of Leon Cooperman's Open Letter to President Obama Sent Nov. 28, 2011:
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.
Leon G. Cooperman Chairman and Chief Executive Officer
Will “International” Norms Override Civil Liberties and Protections Against Violent Crime?
The Supreme Court has agreed to hear challenges to life sentences without parole for teenage murderers, in Miller v. Alabama and Jackson v. Hobbs, two cases in which teen killers argue that such sentences always violate the Eighth Amendment’s ban on cruel and unusual punishment, no matter how horrible the crime.
In Graham v. Florida (2010), the Supreme Court, in a 5-to-4 vote citing “international opinion,” outlawed life imprisonment without parole for juveniles who commit rape, torture, and other non-homicide crimes, ruling that such sentences violate the U.S. Constitution’s Eighth Amendment. In Roper v. Simmons (2005), the Supreme Court struck down the death penalty for juveniles in all cases, including homicide cases, citing the “overwhelming weight of international opinion against the juvenile death penalty,” although its ruling cited the existence, as a reasonable alternative to the death penalty, of the “punishment of life imprisonment without the possibility of parole,” which was “itself a severe sanction.”
Left-wing lawyers would like to ban life sentences even for adults who repeatedly torture other people to death. Earlier, New Zealand was pressured to end life without parole for adults who commit “the worst” murders, based on a supposed rule of “customary international law” against life imprisonment without parole. Citing Spanish law and supposed international human-rights norms, Spain now refuses to extradite terrorists who plot mass murder to the United States unless the U.S. agrees not to seek life imprisonment without parole.
In relying on “international opinion” to decide the case, the Supreme Court set a dangerous precedent for civil liberties, since foreign legal systems and international lawyers are often hostile to free speech, religious freedom, and other basic civil liberties, and the right of homeowners to defend themselves against criminals by wielding a knife or gun in self-defense. The U.N. Human Rights Council says there is no human right to self-defense, and that, quite the contrary, international human rights norms require “very severe gun control.”
The libertarian Cato Institute, which frequently files amicus briefs in the Supreme Court seeking to promote civil liberties and privacy rights, joined an amicus brief in the Graham case asking the court not to rely on “international norms,” since doing so would “undermine the democratic process and rule of law, casting considerable uncertainty over many U.S. laws.” The Competitive Enterprise Institute also joined that brief.
Opposition to life sentences is based heavily on snob appeal, sanctimony, and contempt for the unwashed masses. Eighth Amendment challenges to life sentences are based on supposedly “evolving” notions of decency that are not in fact shared by most contemporary Americans, who continue to support both life sentences and the death penalty in public opinion polls; and on “international” norms against life imprisonment that conflict with their own country’s traditional values.
Ultimately, even many liberals may come to regret their reliance on “international opinion,” which sets a dangerous precedent for civil liberties. In USA Today, liberal law professor Jonathan Turley discussed how international norms against blasphemy and the “defamation” of religions promoted at the United Nations are undermining freedom of speech and resulting in restrictions on speech perceived as inconsistent with Islam: “Around the world, free speech is being sacrificed on the altar of religion. Whether defined as hate speech, discrimination or simple blasphemy, governments are declaring unlimited free speech as the enemy of freedom of religion.” Turley describes cases such as the arrest of a Dutch cartoonist for depicting Christian and Muslim fundamentalists as zombies; the investigation of an Italian comedian for joking that in 20 years, the Pope will be in hell; the exclusion of a Dutch politician from Britain because he made a movie describing Islam’s holy book as “fascist”; and the prosecution of writers for calling Mohammed a “pedophile” because of his marriage to 6-year-old Aisha (which was consummated when she was 9).
Obama Takes Off the Gloves
After three years of expanding the federal government's cost and scope, the guy who campaigned on a "net spending cut" pushes for a newly activist Washington
Finally! "In Kansas," the New Jersey Star-Ledger editorialized this week, "Obama finally found his voice." By theatrically following Teddy Roosevelt's "New Nationalism" footsteps in Osawatomie, Kansas, the president had "finally seize[d] the moment," Michael Tomasky enthused at The Daily Beast. "With this speech, the President finally brings long-sought thematic and programmatic coherence to his many proposals and policy initiatives," Cornell University law professor Robert C. Hockett offered in an "expert available" press release.
The scent of sweet release wafted all over the media. "Obama appears finally to have recognized the fruitlessness of trying to govern in the post-partisan mode on which he campaigned for president," Bloomberg Businessweek columnist Joshua Green wrote. Former Bill Clinton labor secretary Robert Reich spoke for many when he said: "Here, finally, is the Barack Obama many of us thought we had elected in 2008.
This may well be true from the point of view of progressives. But the rest of us—a majority of Americans—are more apt to remember a candidate who won the election on an altogether different selling proposition.
The Teddy Roosevelt speech that Obama was attempting to update for the 21st century contained enough freedom-constricting, bureaucracy-enhancing verbiage to make libertarians shudder, but it did contain one formulation that the president would do well to heed:
[W]ords count for nothing except in so far as they represent acts. This is true everywhere; but, O my friends, it should be truest of all in political life. A broken promise is bad enough in private life. It is worse in the field of politics. No man is worth his salt in public life who makes on the stump a pledge which he does not keep after election; and, if he makes such a pledge and does not keep it, hunt him out of public life.
Arguably the most important economic policy pledge candidate Barack Obama made on the stump, repeatedly, was a vow to enact a "net spending cut" on the federal level. Here he is repeating the pledge, after the financial crisis of September 2008 and the introduction of the first major bank bailout:
Immediately after being sworn into office, President Obama obliterated this pledge, jacking up federal spending by a stunning 18 percent in fiscal 2009, to a then-record $3.5 trillion. As the Congressional Budget Office pointed out, federal spending that miserable year "rose even faster...than revenues fell." The "rate of increase was nearly three times the average growth rate of federal outlays over the previous 10 years."
Candidate Obama campaigned every day—and rightly so—against the "fiscal irresponsibility" of the Bush era. "When George Bush came into office, our debt—national debt was around $5 trillion. It's now over $10 trillion. We've almost doubled it," he complained in his second debate with Republican nominee John McCain. "We have had over the last eight years the biggest increases in deficit spending and national debt in our history."
As president, Obama tacked on another $5 trillion in debt in record time. In every measure of basic budgetary incompetence, the last three years have dwarfed the previous eight, despite the candidate convincing a majority of voters of his superior credentials as a fiscal steward. United States debt zoomed through the 100-percent-of-GDP threshold around Halloween, and as the Baby Boomers get ready to scoop up their old-age entitlements, there isn't even a proposed end to the budget leakage in sight.
And it's not just the size of government, it's the scope. Obama has given historical leeway to regulators on health care and financial reform, and (like presidents before him) is increasing his influence on executive branch enforcement at a time when his sway over the congressional branch continues to wane. All of which begs a question: If we just finished three years of a cautious and centrist Obama, what in the name of government vigor will the next 12-60 months look like?
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