Wall Street’s war on the poor
Sacramento's largest corporate landlord is squeezing renters out
Throughout 2017, the news on NPR sounded to me like some kind of dark satire. Day after day: a vicious presidential lie, a horrendous ISIS war crime, a heartbreaking refugee tragedy, a police shooting, a school shooting and then, in the standard radio-news trope that ends each segment with a market report: “The Dow climbed 107 points today.” “Stocks jumped again today, reaching a new record high.” “The Dow soared 332 points on Thursday!”
In the real world, the year was a nightmare. On Wall Street, 2017 was the best year ever. Since Donald Trump took office, the Dow has advanced 28.5 percent. (This week’s “correction” won’t hurt much.)
These have also been good times for companies dealing in private equity—assets such as real estate and gold mines. The Blackstone Group, one of the world’s largest, posted record profits last year.
As Scott Thomas Anderson’s story on page 8 shows, Blackstone is the largest private property-owner in Sacramento, with the largest number of rentals. The company made some of its money last year by raising rents on people who can hardly afford it.
The folks managing this money—the guys Paul Krugman and your grandpa call “wheeler-dealers”—are the most well-paid executives in the nation. In 2008, Barack Obama suggested that they ought to be paying the same tax rates on that income as working Americans. Stephen Schwarzman, Blackstone’s co-founder and chairman, responded with a violent admission: “It’s a war,” he said. “It’s like when Hitler invaded Poland.”
Obama lost that battle. The Wall Street guys won. And Schwarzman was correct. This is war.