Bill Gross Guardian Interview

http://www.futureofcapitalism.com/2010/03/bill-gross-pimco-guardian-interview

The British newspaper the Guardian gives Pimco bond fund co-founder Bill Gross a forum:

"It was a terrible display of excess and greed. Wall Street has had it too good for decades, it's time for Main Street to go on the ascendancy."

Markets will be downsized by regulation, even if governments are slow in applying new laws. "The sun is not setting on Wall Street – there will always be sunshine on financiers – but high noon is in the past. It's time for ordinary people to benefit."

Governments should raise taxes on bankers, who "don't deserve all this", Gross says, including himself. "I don't need so much," he says. Economies such as the UK and the US should look to making "things, rather than paper" to prosper.

FutureOfCapitalism.com reaction: The "excess and greed" on display wasn't just on Wall Street. Plenty of ordinary Americans were living in houses that maybe were too big and too expensive for them when they would have been better off renting or owning something smaller and cheaper. Plenty of Main Street mortgage brokers and real estate agents were making money on the way up.

If Mr. Gross feels he doesn't need so much, nothing is stopping him from writing a check to the U.S. Treasury or to a non-profit organization to give the money away. But like many left-wingers, he wants to impose his own personal preference on others in his profession, by raising their taxes -- even though he's unwilling to follow through on his personal convictions by voluntarily giving away that money he says is too much.

Meanwhile, Mr. Gross was all over CNBC back in 2008 urging the government to come in and back Fannie Mae bonds, which he held plenty of in his Pimco bond funds. We noted back in August that the Federal government had put at least $46 billion into backing those bonds, which was an outcome good enough for Pimco that Mr. Gross could afford to buy an 11,000 square foot, nine bedroom, 12 bathroom house for $23 million as a tear down. The Guardian article doesn't mention the house, preferring to depict Mr. Gross as a man of the people: "Gross's idea of a fun weekend is to have a $12 dinner with Sue, his wife of 25 years, in the local El Torito Mexican chain."

Now Mr. Gross wants the government to raise his taxes. How about this, Mr. Gross: the government leaves your tax rate alone, but you give back your share of the $46 billion that the taxpayers put into propping up your Fannie Mae debt? And you also give back the value of the equity in Fannie Mae and in the rest of the financial system that was destroyed by the confidence-sapping effects of the seizure that you cheered on?

Mr. Gross's distinction between things and paper is a classic example of what Jerry Muller, in his book Capitalism and the Jews, calls "The Long Shadow of Usury."

Mr. Gross tells the Guardian: "When I go home, I don't watch Fox and I vote for Obama."

The link to the Guardian article came via The Browser.

by Ira Stoll  |  Mar 14, 2010 at 10:53 pm Related Topics:  Banking, Bill Gross, Capital Markets Regulation, Fannie Mae, Non-Profits, Press, Reverse Robin-Hood, Taxes receive the latest by email: subscribe to the free futureofcapitalism.com mailing list