A rich guy threw a party. Get over it.
Leon Black, head of private equity firm Apollo Global Management (apo), is getting skewered today for spending millions of dollars on his 60th birthday party this past weekend.
Elton John did the singing, Vera Wang did the dressing and and it didn't help that attendees like Sen. Chuck Schumer (D-NY) and Mayor Mike Bloomberg added to an air of corporatist complicity. For example, here are a couple of comments left at Dealbook:
- "Sounds like a lovely party. Early in the last century, it would have been one of the many causes leading to the Bolshevik Revolution - lavish lifestyles while the underling classes suffer horribly (otherwise known as an inequitable distribution of wealth)."
- "He's a 'job creator' leave him alone. just think all the people he keeps gainfully employed slaving away at his assembly lines manufacturing wealth. He's doing god's work."
- "We are living in a world where white is black and black is white. The Wall Streeters are just rubbing it in the face of everyone else. I got mine and I don't care about you."
I get it. I really do. People are hurting and this seems needlessly ostentatious. But of all the buyout bosses, Black is one of the last ones who should be getting such grief.
In January 2010, Black became the highest-profile private equity executive to advocate for a change in the way that PE profits ("carried interest") are taxed. When asked how he would argue in support of keeping carried interest taxed as capital gains, he told a New York conference audience:
"I'm not sure I would. It wouldn't be the worst thing in the world to have some adjustment... I don't think it should be ordinary income, but maybe something in between."
This hybrid solution falls short of what I've been advocating, but still is far superior to the status quo arguments that we've heard from most of his peers. It reflects Black's understanding that he is not currently paying his fair share, and a courageous willingness to say so publicly.
Moreover, Black has spent years making large campaign contributions to Democratic politicians who have been trying to increase taxes on the wealthiest Americans. He even gave $1,000 to Rep. Sandy Levin (D-MI), who sponsored the first-ever bill the change the way carried interest is taxed. In other words, Black literally has been paying to get taxed more. And that doesn't even address his philanthropy.
To be clear, I do not believe that Leon Black is a saint. Far from it. But my quarrels are not with some false notion that he is being miserly while millions of Americans suffer.
Are those who attack Black today doing so because he is wealthy or because he is a presumed hypocrite? If the latter, you are clearly wrong. If the former, shame on you. It's that type of knee-jerk demonization that makes it so easy for Norquist acolytes to dismiss the rest of us as envious parasites.
Leon Black has a lot of money. He gives lots of it away, and is more than willing to be taxed at a higher rate. He also hosted an extravagant birthday party on private property. Good for him. I hope he had fun.