The Good Billionaires

Last week at the DNC, financial software magnate and ex-politician Michael Bloomberg enthusiastically endorsed Hillary Clinton, and denounced Donald Trump. Bloomberg said that he, unlike Trump, had “built a business” without “a million dollar check from my father.” On Saturday, billionaire Shark Tank host and Dallas Mavericks owner Mark Cuban introduced Hillary at an event in Pittsburgh, calling Trump “batshit crazy” and a “jagoff.” (Cuban has previously spent his time on Twitter mocking Trump for not having as much money as he says he does.) And on Monday, Warren Buffett, the world’s third-wealthiest man, became the latest billionaire to stump for Hillary. Buffett introduced Clinton at campaign event in Omaha, where he offered to disclose his tax returns if Donald Trump would do the same.

The Clinton campaign has proudly shown off the endorsements of Bloomberg, Cuban, and Buffett. The theory, evidently, is that those wealthier than Trump are in an excellent position to put him in his place. Each of the three men has heavily criticized Trump’s dismal record as a businessman. But it remains to be seen whether offering up a parade of billionaires is a good way of neutralizing a populist candidate. And to the extent that Clinton’s message seems to be “I am adored by the super-wealthy,” she may not be doing much to rope in disaffected Sanders supporters.

There’s something slightly peculiar about the Democrats’ enthusiastic embrace of the über-wealthy. Mark Cuban, for example, plays a vicious executive on a reality show in which people compete for the favor of wealthy patrons. Does this sound familiar? With Cuban spitting out words like “jagoff” and “batshit,” the Clinton campaign makes it clear that it doesn’t object in principle to vulgar billionaires from reality television. Just certain vulgar billionaires from reality television.

Likewise with Michael Bloomberg. Not only is Bloomberg one of Trump’s social peers, but he also shares Trump’s record of crassly sexist commentary. In a sexual harassment lawsuit filed against Bloomberg’s company by four women, Bloomberg allegedly told an employee to “Kill it!” when she informed him she was pregnant. Previously, upon hearing the employee was engaged, Bloomberg replied “What, is the guy dumb and blind? What the hell is he marrying you for?” and suggested the woman’s father must have paid her fiancé to marry her. Bloomberg also admitted saying “I’d do her” in regard to an employee, and when asked about an allegation that he’d said “I’d do that piece of meat,” replied that he “didn’t recall” using the specific term “meat.” (Note: not “I would never say such a thing” but “I don’t recall saying such a thing.” As any lawyer can tell you, “I don’t recall doing that” can generally be translated as “I definitely did do that.”) Bloomberg settled the suit for an undisclosed sum.

Other Bloomberg remarks on women were similarly crass, including cracks about “fat broads” and a certain “horse-faced lesbian.” A book of Bloomberg’s “wit” compiled by employees included such sparkling, borderline Wildean maxims as: “If women wanted to be appreciated for their brains, they’d go to the library instead of to Bloomingdale’s” and “I know for a fact that any self-respecting woman who walks past a construction site and doesn’t get a whistle will turn around and walk past again and again until she does get one.” Bloomberg’s disparagement of women’s intelligence extended into his public role as New York’s mayor. When a female judge found Bloomberg’s stop-and-frisk policing practices unconstitutional, Bloomberg told the public that “your safety and the safety of your kids is now in the hands of some woman who does not have the expertise to do it.” (Bloomberg’s stop-and-frisk policies are a scandal of their own. Bloomberg was caught on tape at Aspen suggesting that police should always be on the look out for “male minorities,” and his law enforcement policies resulted in massive unconstitutional harassment of young black men. When Bill deBlasio campaigned against the practice, Bloomberg said deBlasio’s platform was “class warfare and racist.”) None of this kept Bloomberg from being granted a coveted speaking spot at the Democratic National Convention.

But what about Warren Buffett? The humble and grandfatherly Omaha sage is often treated as exemplary of the “good” kind of rich person. He guzzles Coca-Cola, lives in a modest ranch house, and has pledged to give his fortune away. Buffett’s lifestyle is so ordinary that his son professes (implausibly) that until he was in his mid-20’s, he had no real idea what his father even did for a living.

Buffett’s actual wealth, however, is built on some deeply questionable practices, as intensive investigations by journalists have uncovered. Reports by the Center for Public Integrity, in cooperation with BuzzFeed and the Seattle Times, carefully exposed racially discriminatory predatory lending practices by a major Berkshire Hathaway subsidiary. While Buffett’s public image is staunchly Democratic and decent, his corporation extracts poor people’s money in downright cruel ways.

The situation is as follows: Buffett’s Berkshire Hathaway owns a major company called Clayton Homes, the largest manufacturer of mobile homes in America, which operates through a network of over 1,600 dealerships. In fact, Clayton Homes “builds nearly half the new manufactured homes sold in this country every year, making it the most prolific U.S. home builder of any type.” Clayton Homes is also in the home financing business (through a subsidiary called Vanderbilt Mortgage), and “finances more mobile-home loans than any other lender by a factor of more than seven.”

But when the Center for Public Integrity spoke with borrowers, it found that they were misled in often shocking ways, concluding that the company “relies on predatory sales practices, exorbitant fees, and interest rates that can exceed 15 percent, trapping many buyers in loans they can’t afford and in homes that are almost impossible to sell or refinance.” Numerous buyers of Clayton mobile homes reported that they were tricked into accepting mortgages from Clayton’s Vanderbilt financing subsidiary. In “three dozen interviews, Clayton’s minority customers said they were led to believe that Vanderbilt was the only option to finance their homes.” Clayton was also caught on tape lying to impoverished Navajos, telling them they could only finance their purchase through Vanderbilt, even though their tribe offered its own low-interest home loans.

Many customers were shocked when they found out their interest payments were much higher than they had been led to believe. “I’m so stupid,” said one customer. “I thought I could understand it myself, and trust them, because they were so nice. But that all changed the second I signed that paper.” But part of this confusion was deliberate. Buffett’s company took advantage of customers with limited English ability; their “practice was not to provide Spanish-speaking customers with translated loan documents or interpreters at closing — even after employees at headquarters complained that too many customers were being misled about loan terms.” Yet when one Clayton representative was confronted about their methods, he replied: “It doesn’t really matter as long as we get the money.”

And they do make sure to get the money. When the mobile home residents fall behind in their payments, as they so often do, Buffett’s company’s debt collection methods border on the thuggish. Customers tell of employees “making groundless threats, calling relatives or employers to apply pressure, or berating borrowers until they either cried or figured out how to get some money.” Employees are pressured “to be ‘mean’ or ‘condescending,’ for example telling customers behind in their payments to cut back on groceries or forgo medical care.” (Although evidently “[c]ollectors typically were less abusive to white borrowers.”) When one debtor couldn’t meet her payments, and asked the company what to do, Buffett’s representatives recommended she sell her plasma.

The investigation also found that minorities were being charged far higher rates on loans than white customers. The company “typically charges black people who make over $75,000 a year slightly more than white people who make only $35,000.” It’s not unusual for racial minorities to be given higher interest rates, due to underlying financial disparities (black families are far less wealthy than white families), but the racial differences found in Buffett’s company were the “largest among big mobile-home lenders.” And the actions by Buffett’s company are of national consequence for African Americans, since its “grip on the lending market verges on monopolistic,” and in one year it “made 72% of the loans to black people who financed mobile homes.” (Buffett’s company’s practices are somewhat ironic, given that Democrats have condemned Donald Trump for his discrimination against minorities in the real estate market.)

For black Clayton employees, the racism was even more blatant. Through interviews and case records, BuzzFeed and the CPI uncovered a situation of “open racial hostility” in company offices. Multiple black employees were surprised to find themselves accused of stealing furniture. Managers referred to an African American worker as “Sambo” and “Buckwheat.” (They said they were “having fun.”)

The racism also extended toward the company’s internal view of its customers. When black prospective customers toured the homes on the sales lot, a Clayton employee referred to the lot as “niggerville,” adding for emphasis that “I can’t help myself, I hate niggers.” White agents for the company “openly ridiculed black borrowers, mimicking stereotypical black vernacular on the phone, then referring to them as ‘niggers’ after hanging up.” Native American customers experienced similar discrimination. One recalled that “Vanderbilt collection agents told her that Navajo people are ‘too stupid’ to understand loan terms” while another remembered a “collector asking whether his family had spent all of their money on alcohol.” Through dozens of interviews with employees of Buffett’s company, the CPI and BuzzFeed uncovered “a corporate culture that has condoned racism, including black employees fired while white workers used discriminatory slurs and kept their jobs, and phone collectors casually insulting borrowers with racist stereotypes.”

Warren Buffett’s own responses to the investigations have not been reassuring. Buffett dismissed the Center for Public Integrity investigation as mere “activism.” “I make no apologies whatsoever for Clayton’s lending practices,” he has said. “In the past three years, I have received not one call from any party in connection with a Clayton Home.” Buffett seems to operate on the premise that if his borrowers were dissatisfied, they would have called him on his personal line. Berkshire Hathaway did release a statement in response to the Center for Public Integrity investigation. But the company only refuted certain selected facts, and fudged others, leaving the bulk of the substantive allegations intact.

The practices by Clayton Homes and Vanderbilt have caused serious harm to large numbers of people. The CPI/BuzzFeed investigation reports that Buffett’s companies “have damaged minority communities — from rural black enclaves in the Louisiana Delta, across Spanish-speaking swaths of Texas, to Native American reservations in the Southwest. Many customers end up losing their homes, thousands of dollars in down payments, or even land they’d owned outright.” In this way, Clayton and Vanderbilt, “extract billions from poor customers around the country — particularly people of color, who make up a substantial and growing portion of its business.” (This is not the only way in which Buffett’s Clayton Homes has damaged the lives of people of color. In the wake of the 2010 Haitian earthquake, Buffett’s company supplied relief shelters that were unsafe and laced with formaldehyde, which soon began making children sick. The trailers were supplied as part of an arrangement made between Buffett’s company and the Clinton Foundation, which was overseeing the earthquake recovery.)

Let’s be clear, then, about how Buffett makes a portion of his fortune: as one of the country’s largest slumlords. Buffett is in charge of an openly racist company that squeezes money from destitute mobile-home dwellers, with employees instructed to make borrowers cry so that they will find ways to make their payments. Buffett’s company literally enriches itself from the sale of poor people’s blood. That sounds ludicrous in its cruelty, even Dickensian. But one need only listen to the phone recordings obtained by BuzzFeed, in which Buffett’s company explicitly recommends that a black woman sell her plasma in order to pay them. Disguise it beneath whatever finance industry euphemism you please, but this is how Buffett’s money is made.

It has been puzzling watching the Democrats’ emerging general election strategy. Instead of attempting to articulate a compelling social agenda, which would deal with the debt, alcoholism, and suicide that afflict working-class Republican voters, the Clinton campaign has evidently decided to position itself as the choice of sensible elites. Instead of trying to find ways to deal with people’s woes and fears, Clinton has deployed Mark Cuban to laugh at Trump’s finances, and Warren Buffett to bring up the issue that voters care about most: wealthy men’s tax returns.

But that’s in keeping with the present-day Democratic philosophy on wealth, which is essentially harmonious with the Wall Street worldview. The Democratic party is in no sense hostile to the rich. It believes that so long as one is culturally progressive, there is nothing objectionable about the possession of a material fortune. (By the way, there is something wrong with being wealthy. Money is power, and so to have more money than other people is to have power over them. And the possession of great wealth in a time of great suffering is impossible to justify.)

Yet the super-rich turn out, on the whole, not to be good people. Just as wanting to become president is an impulse so perverse that it should instantly disqualify a person from holding the office, the fact that a person has quested after mountains of dollars should instantly cast serious doubt on their moral character. Some billionaires are personally unpleasant, like Bloomberg, who maintains a civil deportment for the cameras and then makes crass remarks about women’s rear ends in private. Others are like Buffett, superficially polite but dependent on human misfortune as a source of their wealth. Buffett seems kindly enough in person, but he has built a sprawling apparatus designed entirely to siphon money from mobile-home dwellers so it can be placed into Warren Buffett’s bulging bank account.

The Democrats’ embrace of amoral billionaires makes it highly unlikely that the party will follow through on any meaningful attempt to reduce American economic inequality. Instead of incorporating the Sanders constituency, and its critique of excessive wealth concentration, the Clinton campaign has enlisted plutocrats as campaign surrogates, to gloat about their superior business skills and wave around their tax returns. And so, far from presenting a meaningful opposition to Trumpism, Clinton touts the endorsements of her own set of slumlords, sexists, and reality show vulgarians. But since Clinton’s political party no longer seems to have any consistent principle except hatred of Clinton’s opponent, they cannot even be accused of true hypocrisy. A hypocrite must at least profess a certain set of moral standards. In today’s Democratic Party, predatory lenders and workplace harassers are welcome, so long as they share the goal of making Hillary Clinton the President of the United States of America.