Frank Louis
My tax-day comments... patriotic millionaire Whitney Telson, don't be so cheap: give your secretary a raise... why not double her pay?
By Frank Louis
April 17, 2012

As we all know quite well, Patriotic Millionaires, including hedge fund millionaire Whitney Telson, along with his underpaid secretary, all attended an event at our expense with the president last week to announce what he calls the Buffet (or "Reagan") Rule as the president would have us believe. Warren Buffett, you may know, has outstanding tax bills dating to 2002 to the tune of around $1-billion I believe. Does the Buffett Rule give us all 10-year plans on our $1-billion tax bills too?

I was listening to the Larry Kudlow CNBC program about this event on Wednesday April 11 and I would think that I could not be surprised by anything these days. I'm wrong again! Seriously, what ever became of logic or what use to be called "common sense?" I heard once that the big question pertaining to "common sense" was; why was it called "common," if nobody seems to have it? I now see what they meant by that.

This group (not their underpaid secretaries) has been dubbed the "Patriotic Millionaires." I have looked up many of them. I suggest you do the same. See how they made their millions. We always hear how the Obama Administration is down on Wall Street, but it also seems that many if not most of the "millionaires" sitting at this even are from that sector. Did many of these "millionaires" make their money from the housing crisis, perhaps since 2008? Just curious.

The reporter discussing the event with Larry Kudlow mentioned that he had spoken with "patriot millionaire" Lawrence Benenson who also attended the event. Lawrence Benenson is the manager of Benenson Capital Partners, (a hedge fund that makes billions from the real estate crisis unlike you and me... the property owners). He complained that the growing income gap is creating "social instability" and "rampant incivility." But, he added that he is "just a big picture guy" so he could not be more specific. He hasn't a clue. Is it uncivil of someone to be upset when they have been robbed of their property by people who made billions from their losses?

I can tell him one thing, if the people manipulating the financial stability of our almost 300-year-old economy would quit playing with it, the problems he is mentioning would cease. If he does not know, American working people who own real estate have lost over 10-trillion dollars, just about the same amount hedge fund managers have earned in that same time. Adam Smith once talked about how the value of an item is directly relative to the "toil and trouble" one is willing to take to acquire it. This seems to be an outdated principle. Today, creating instability in the marketplace, not by making products, creates millionaires. No, serious money these days is made by manufacturing instability and crisis, not goods and services. Seems that is how everything works these days: manufactured crisis after crisis.

We complain and hear complaints that there is no federal budget and has not been one in over 3-years. Don't you know: Budgets are "so ten-minutes ago." The new monetary system does not work like your and my personal budgets. If you can print all of the money you want, why have a budget? It is as Keynesian as you can get! QE3? This is how it works nowadays. Work? Work is just another tool for the investment community to leverage in a seesaw economic environment. Work is no longer rewarded. As Crosby Stills Nash sang some 40-years ago, we are truly just "cogs in something turning." However "stirred" is a better choice of words today.

The "Patriotic Millionaire" guest on Larry Kudlow's show was Mr. Whitney Telson. Mr. Telson, is a hedge fund founder/director (T2 Partners) and has been applauded and outspoken on how to make big piles of money from the hardships of other Americans by playing the modern monetary theory of just harvesting money by taking advantage of created calamities such as the Housing Crisis and printing up more and more money.

You know, "unwinding the asset bubble" is what he speaks on. The bubble that was created by sub prime mortgages and mortgage-backed securities and by knowing when to short the markets. I am not accusing him of any wrongdoing. I just want to know why, if he is so concerned about "equality" and "fairness" why, in all of his appearances and writings, he has not spoken up for the people who actually invested money in the real estate market and were robbed in the crisis from which he had made his fortunes. Fair question?

Telson was even on a 2008 "60-Minutes" documentary on the housing crisis. He surely could have said something then. He has written and spoken on the opportunities associated with this crisis but I have never heard him mention the people who lost money because they put money down on fraudulently overvalued real estate where mortgages just became a tool to create the overvalued mortgage-backed securities that brought this all down. . You know, the real estate that became overpriced because those in the financial sector did not disclose the number of subprime loans, much less the number that was defaulting. Weren't they hedging bets against us as a matter of fact?

Like Mr. Soros, his earnings are not from providing goods or services that people can enjoy... it is from hedging investment bets and inflating a faltering economic situation that can be manipulated. In part, this is thanks to the government and the revolving door policy between the government, the financial community, and certain universities and think tanks that preach the system. "Let's just start handing out bad mortgages and see where it takes us." In fact, I would like to see a list of these left leaning millionaires who were in attendance and see how most made their millions. I would bet a large cup of truck-stop quality coffee that they are not from any sector other than investment (banks, hedge funds etc) of the economy. A very sector that our president claims to be fighting.

Telson complained that his tax rate is lower than his secretary's tax rate by about 8% (25% / 33%). He also complained that he makes 39-times the salary he pays his secretary. Wow, I feel your pain Mr. Telson. What a quagmire and I truly see where you need government intervention in solving this problem. A real Keynesian style solution, I am sure you would attest, would be at hand.

On this same Kudlow program, Steve Moore, of the Wall Street Journal and a regular guest on the program, pointed out to Mr. Telson that it is perfectly legal and that there is even a line on the US tax form for paying as much additional tax as one wants. If Mr. Telson feels so strongly about paying more taxes (as seemingly do the other patriotic millionaires in attendance as well) "just do it."

That's right, just pay as much as you like, or don't take so many deductions. Mr. Whitney Telson just gave back a blank stare and a smirk of sorts and brushed off the comment like it was a totally ridiculous concept. He sort of mumbled "Uh-yeahup..." and that was it. Fact of the matter is that Telson's income is largely from capital gains, taxed differently. If you need the term "Capital Gain" clarified I have a simple definition for you. Capital Gain: The money we lost when the value of our real estate dropped through the floor; that is capital gain. Is that clear?

So, Mr. Moore's suggestion solves the first part of the quagmire that Mr. Telson and his left leaning "Patriotic Millionaire" Friends are in. However, David Axelrod later was quoted on Fox News saying that this is "not how it works" and that it is not a "voluntary system." Does that ever give me hope! Ha! More government control, just what we need.

Now let me suggest the solution for the other element of this issue that Mr. Telson cannot come to grips with: the inequity between his and his secretary's incomes. Give her a raise! Please, Mr. Axelrod, no government intervention... Or can this not be voluntary either?

In fact, double her salary, that way you would only be making 19.5-times her salary rather that 36. Think you could afford that or, as Mr. Axelrod suggests, do we need some government regulation for that too? Maybe another taxpayer funded TARP bailout to supplement the under paid people you proudly employ and underpay. Let's get to work on that soon. Quick, call in Nancy Pelosi, Barney Frank, and Harry Reid and write up the 2,000-page bill.

Fact is, I would be humiliated beyond belief if I were as pompous as you to go on national television and flaunt how badly I pay my help. Wake up man, wake up!

Whitney: Give your Secretary a raise! Why do you pay your employees so poorly?

PS: Where can I get my "Not A Patriotic Millionaire" tee shirt? XL.

© Frank Louis


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Frank Louis

Frank Louis is a print and on-air commentator who offers opinions and solutions on and for the economy, social issues, and the future of this nation. In the Old Testament, Nehemiah 4: 14 instructs us to fight for our houses; something we need to be doing now. Our future generations depend on it!... (more)


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