Steven Rattner has an op-ed in today's Wall Street Journal describing the skeptical reception he got at the Ira W. Sohn Investment Research Conference when he said income inequality was to blame for the anger at Wall Street. He was booed. Mr. Rattner writes: "I was dumbfounded. Was he seriously questioning my suggestion that 30,000 Americans should not command a full 6% of income in this country (a higher percentage than at even the end of the Roaring '20s)?"
A FutureOfCapitalism.com reader-participant-community member-watchdog who actually attended the conference has part of the story that Mr. Rattner didn't share. When Mr. Rattner made his complaint about income inequality, he used the word "gets," as in, 30,000 Americans shouldn't "get" 6% of the income. When he was followed by the next speaker, Larry Robbins of Glenview Capital, Mr. Robbins pointedly corrected Mr. Rattner: I think you meant "earns," not "gets." The crowd cheered.
The point Mr. Robbins was making, one that apparently eludes Mr. Rattner, is that income in capitalism isn't doled out or commanded. It's negotiated for, or won in exchange for labor and risk and ideas and productivity. It's not up to Mr. Rattner how much money the top 30,000 Americans make. It's up to whoever decided to pay them the money -- usually customers with choices.
The whole piece, which runs under the headline "Wall Street Still Doesn't Get It" is fascinating in a strange way, particularly because Mr. Rattner himself is under a lot of heat from the Securities and Exchange Commission. Maybe he thinks if he parrots the Obama line on income inequality the SEC will lay off him?