Tom Perkins: The Very Shaky Defender of the 1%

Tom Perkins, co-founder of the Silicon Valley venture capital firm, Kleiner Perkins, has been in the news of late because of his recent statement that the attack on the one percenters is similar to the early attacks experienced by Jews during the Nazis era. Since, them MSM  has acted as though he is the spokesman for the 1%.

Last night, San Francisco's The Commonwealth Club held an interview event, where Perkins was interviewed by Fortune magazine's Adam Lashinsky. I attended the event.

The questioning by Lashinsky was quite hostile and, from a free market perspective, Perkins' performance was very shaky. The biggest problem with Lashinsky's questioning was that throughout the event he framed his questions in the context of "the problem of income inequality," as though it is a given that incomes should for some reason be more equal. Not once did Perkins object to this shaded questioning and he didn't even come close to articulating the analysis of the income inequality debate in the manner that Joseph Salerno recently did. (See: Joseph Salerno On Income Inequality)

Salerno correctly pointed out that there are two streams which result in high incomes. There are private sector high incomes, which are the result of individuals providing goods and services that consumers desire, and high incomes that are the result of  government employees and agents, who provide no products desired by consumers and have high incomes as a result of their parasitic takings from the productive private sector.

There was nothing about this from Perkins.

That said, Perkins was very solid on pointing out the destruction, especially to black families, that has resulted from LBJ's Great Society programs.

He also made these important points:

When you take into consideration estate taxes on top of income taxes, the rich end up paying 75% of lifetime wealth accumulation to government. He said this is persecution.

He also stated that the current low interest policy by the Fed was a terrible policy.

He said, the old first line job of being a paperboy has been destroyed by child labor laws and the minimum wage.

He said that Silicon Valley is a meritocracy and not about race. He did note though that when he spoke to a group that was set up by black business professionals to teach young blackstudents about entrepreneurship, the business professionals/mentors showed up for his talk, but no students did, which he said was a terrible sign.

On the other hand, Perkins made these horrifying comments:

Perkins said there is not much you can do about the high rents in San Francisco---which means Perkins' appears to have no idea how rent controls and building restrictions distort the price structure of rents.

He said he was for very strong military funding and also in favor of expanded government funding of scientific research.

He also said a solution for the very high poverty levels in the US, though caused by the LBJ-type policies, would take a very long time to fix---which suggests he has no idea how quickly an economy fixes itself after regulations and distortions are eliminated.

He called smaller government and deregulation a trap.

He said medicare is great, it is just underfunded.

He voted for Jerry Brown in the last California governor's race.

He is in favor of higher taxes on the middle class and called for a VAT.

He said he would like to see a system in the US where only those who pay taxes get to vote, and that the weighting of a person's vote should be based on how much taxes that person pays.

He also made these interesting neutral comments:

He said as a result of Fed monetary policy, $100 billion has flowed into Silicon Valley start-ups.

He said that his firm has created between 20 and 30 billionaires.

If he were in his 20s (he is 78), he said he would move to Australia which he says has a "can do" environment similar to what he first experienced when he moved to California in the late 1950s.