Treating income earned as a partner in a private equity firm the same as ordinary labor income is like invading Poland:
President Obama and the business community have been at odds for months. But in July the chairman and cofounder of the Blackstone Group, one of the world’s largest private-equity firms, amped up the rhetoric. Stephen Schwarzman—the leading John McCain supporter in a firm that, in 2008, gave more money to Obama—was addressing board members of a nonprofit organization when he let loose. “It’s a war,” Schwarzman said of the struggle with the administration over increasing taxes on private-equity firms. “It’s like when Hitler invaded Poland in 1939.”
Newt Gingrich, meanwhile, takes the view that building a mosque in Lower Manhattan “would be like putting a Nazi sign next to the Holocaust Museum.”
So on the one hand you basically have Schwarzman making a mountain out of a molehill, suggesting that his effort to increase his take-home pay is analogous to a world-historical struggle over the future of human freedom. On the other hand you have Gingrich saying that the Islamic religion is on a par with Nazism and that Muslims worldwide are collectively responsible for the actions of a few dozen individuals. I’m going to say that Schwarzman is the winner here. He’s being grandiose and tasteless, but his basic point—this is a big deal for private equity managers and they intend to fight very hard to keep their taxes low—is perfectly cogent. Gingrich, by contrast, is just being loathesome and odious.
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