Sam Zell: Tom Perkins Was Right, Top 1% "Pummeled" For Political Convenience

Tyler Durden's picture

"Markets were over-priced coming into 2014," warns Sam Zell (noting that he does not believe in the Fed's wealth effect perspective on market-growth helping buying and selling decisions in the real economy), but while he sees a benign outlook for residential real estate, among his biggest concerns are "half-assed" Obamacare's "deleterious effect on the USA" and its "need to be radically changed." Supportive of Carl Icahn and his 'capitalist activism', Zell adds rather frankly that he believes Tom Perkins was correct about the "the 1%... for political convenience," and reminds Bloomberg TV's Betty Liu that "the politics of envy, the politics of class warfare are what has separated America from many parts of the rest of the world," until now.


On Activisim:

ZELL: Well, the answer is I think activism is very right and very important in a capitalistic system.


LIU: Just quickly though, Sam, do we have that photo up of Carl Icahn – Carl Icahn on the cover of Time magazine? You and I talked about your relationship. You’ve dealt – you’ve been on opposite sides with Carl before. Master of the universe now. He’s made this comeback at this age, Sam. What do you think about this?


ZELL: Well I don’t think the word comeback is an accurate description. Carl is a force. Carl has been right. Carl has been right and committed to being right. If I had a hat, I would take it off to him. And I think America is dramatically better off for people like Carl.

On Obamacare:

LIU: In Washington, the Congressional Budget Office released some startling new numbers about the president’s healthcare plan that’s sure to fuel more of this partisan wrangling in Washington, including this nugget, that in two years Obamacare is going to affect workers by prompting them to put in less hours in order to keep their federally subsidized healthcare benefits, costing an equivalent of about 2 million jobs according to the CBO.


Well Sam Zell stays with us throughout the hour, someone who is very involved in both local and national politics. And Sam, what do you make of this number, 2 million jobs?


ZELL: Well, I think the issue is not 2 million jobs. I think the issue is what is the contribution to the GDP of – or lack of contribution of 2 million people not working. We both know lots of people who have kept their jobs because they couldn’t afford to lose their healthcare. Now they can access healthcare from exchanges, and all of a sudden keeping a job isn’t as relevant as it was before.


LIU: But Sam, is that a small price to pay as a country for giving everybody healthcare?


ZELL: I think the best comment of all goes to Nancy Pelosi. We have to pass this bill to find out what’s in it. This is only the latest example of hundreds and hundreds of mistakes that were made in the preparation of this bill.


LIU: But do you think it should be repealed?


ZELL: I think that the current form of Obamacare I think is deleterious to our country and needs to be radically changed. The word repeal, I don’t know what that word means. I think healthcare is an important issue. I think the question is how do you go about it. We went about this half-assed.


LIU: But it – well, but however, the cat’s out of the bag and we have to figure out what to do now with the consequences. One of the things though that – that – that seems to be observed now in Washington as we’re – as we’re working through healthcare is that maybe, according to someone like Walter Isaacson who we had on this program, maybe the fever is breaking in Washington Maybe this may be a year where the two sides come together. Do you feel that way at all, Sam?


ZELL: I don’t know what he’s been smoking because nothing I read suggests that. They made a couple of deals on a couple of simple things, but talk to me about immigration. Talk to me about healthcare. Talk to me about foreign policy. There’s so many issues where there’s just this extraordinary disparity between the parties and very little interest in compromise.

On Markets:

LIU: I want to bring back Sam Zell, who’s been standing by. Sam, you think the – you thought the markets were overpriced, right, going into 2014.


ZELL: I did.
LIU: Why’d you think that?
ZELL: Well I think the economic activity did not correlate to the price of the stock market. Stock market was up 25 or – I don’t remember how much it was up last year.
LIU: Like 30 percent.
ZELL: Thirty percent. I (inaudible) companies. We didn’t see any – any Kumbaya happening. So from our perspective it’s a function of too much liquidity.
LIU: So do you feel that this is pretty healthy then to see this – to see this kind of decline?
ZELL: I don’t think declines are ever healthy, but balance is what keeps us in place. And when we get out of balance like subprime loans or whatever, it’s pretty disastrous. So the market has to keep balancing back and forth as consecutive (ph) currents are relevant. And I think the market in 2014 is a lot more likely to reflect what happened in 2014 than whether or not it was up or down in January.
LIU: But does it make you nervous at all, Sam? I know not much makes you nervous at all, but – but seeing how volatile these markets have been over the last few weeks, does it make you more nervous that Americans are going to look at this and pull back and perhaps they may not be buying as much anymore? They may not be selling as – as many houses or buying as many houses.
ZELL: The market went up 30 percent last year. Did the American people buy everything in sight? No. So what’s the relevance now? I don’t think the market has a dramatic impact on buying and selling decisions unless it’s such a prolonged period like we had in ‘08 and ‘09 that it really dampens everything.

On Inequality, Government Complexity, and Persecution of the 1%:

LIU: Let me ask you about Tom Perkins because you are part of the 1 percent. You are clearly part of the 1 percent. Tom Perkins came out with this – with this letter where he defended the 1 percent and he said, look, we are being persecuted the same as the – as the Nazis were persecuting the Jews. And he was just lambasted and he came on our network and defended it. How did you feel when you read that letter and when you heard his comments?
ZELL: I guess my feeling is that he’s right. The 1 percent are being pummeled because it’s politically convenient to do so. The problem is that the world and this country should not talk about envy of the 1 percent. It should talk about emulating the 1 percent. The 1 percent work harder. The 1 percent are much bigger factors in all forms of our society.
LIU: But Sam, tell that – tell that to the person who’s on minimum wage who’s living below the poverty line that they should try to emulate the 1 percent. How are they going to get there?
ZELL: The stories are rampant of people who started with a candy store and took it from there. There are lots of people who have the ambition and have the motivation and have succeed. Lots of people have come from nowhere and become part of the 1 percent.
LIU: But do you feel because you’re rich that you’re being persecuted?
ZELL: The word persecution is not the right word.
LIU: Okay. You’re being picked on.
ZELL: I think that the politics of envy, the politics of class warfare are what has separated America from many parts of the rest of the world. And we have benefited dramatically from not having class warfare, from not having envy. William Jennings Bryan in 1896 was the first person to run publicly in the United States on a platform of class warfare. He lost. And wisdom at the time said this is not America, and I think it still is not America.
LIU: Do you think though that there needs to be some help though or that – that there needs to be policy changes or something needs to be done about the growing income – income inequality, the growing gap? Do you think there needs to be something done with that?
ZELL: I think that that is a function of policies and I think that overall the policies that we passed for the last 50 years, whether it be unfunded Social Security or other issues, have all contributed to this disparity. And we need to fix our government. We don’t need 17,000 new pages of federal regulations in the last five years. So I think all of those things contribute to this disparity. And the more complicated our government makes our world, the more the 1 percent can afford to hire somebody to figure it out and the other guy can’t. But if you simplify government, neither one of them require (ph). And therefore the disparity slows down.

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OH10DESERTER's picture

Has anyone asked Mr. Zell how much leverage he used to become filthy rich...Leverage the mid and lowers don't have access to?

Four chan's picture

he tells it like it is, i may have a man crush on mr zell.

Dollar Bill Hiccup's picture

Then you must be well lubed to receive his ... favor!

Boris Alatovkrap's picture

Definition of Political Envy... Mine government more is bigger than is you!

knukles's picture

Has anybody asked him anything about if he's so fucking smart why he took it up the arse on the Chicago Tribune?

Wahooo's picture

It's a reasonable question. We put these gurus on a pedestal, but they are as likely wrong as anyone else.

strannick's picture

Worked harder at lobbying govt? Worked harder at subverting legislation? Worked harder at hiding income offshore? Santimonious Sam should save his schtick for Davos. The Bankster 1% are the biggest welfare recipients around

WillyGroper's picture

I beg to differ. They are persecuted.

They work harder just like he said!

Pay more in taxes too. 


strannick's picture

Sure thing Willie Loman. Tell that to Buffets secretary. I think you have the 1% mixed up with small business. "The very rich, they aren't like you and me"

STP's picture

THE JOB CREATORS!!!!!   Fuck, how about the "FUCKING MONEY SLOSHERS!!!!!"   Because that's all they fucking do, is get free money, from the FED, through QE, POMO and numerous other BULLSHIT money-manure spreading operations and they go line up at the CASINO, I mean WALL STREET or the FOREX markets and play with that fake money, that got printed out of nowhere, that somebody, will have to pay back someday!  You are an IDIOT!

Timmay's picture

Dear Zero Hedge Readers, I would like to offer a theory.

IF ObamaCare continues to be an absolute political and econimc shit show (as it appears to be) then the only path I see for the Democrats in the elections is quite clear: bring the .98% down to the same level as the rest of the country. I didn't say 1% as we all know what happens to the .02% of wealthy people.

It's pretty simple as to how they will do it (reducing Taper) and it will serve another economic purpose: to drive money into Bonds. Janet "It's Pat!" Yellen could easily accomplish this by continuing the Taper, thus crashing the equity markets, and replacing  the Taper flows with mom and pop "scared out of their minds about their retirement going down the shitter" flows and causing the rest of the country TO BEG for the Government to do "something". And, as the GOP is having a pissing contest over what it means to be (at the very least econimically conservative) the party left to "fix" all that ails the country is only to happy to spend all the future wealth of America on "Programs" to buy votes. I mean come on, what "Executive Orders" do you think they are lining up? Coupled with the MyRA, the enslavement of the 99.98% will be complete.

All bets are off after the clusterfuck of a Winter Olympics in Russia as to what Putin will do as well. Perhaps "War Bonds" will replace Taper flow??

QQQBall's picture

Nope. Red/Blue is bullshit. Wake up

Stoploss's picture

Welfare payments are a chain that binds us to our government master.

Food stamps are a chain that binds us to our government master.

Medicaid is a chain that binds us to our government master.

Social security is a chain that binds us to our government master.

Any form of assistance from the government, comes in the form of a chain to bind us to that master... Government Master...


How many chains do you have???

DeadFred's picture

Personally I've seen a lot of jawboning about the 1% but not a lot of action. It's all theater for the masses and if Zell doesn't have thick enough skin to hear some hard words while .GOV gives him advantage after advantage then he should find honest work. He looks like he could handle being a greeter at Walmart.

strannick's picture

Are you kidding? Look into his eyes. I've seen friendlier in the face of a Crocodile.

rockface's picture

It's not a question of Zell not having thick enough skin it's just that he's not going to cave in and surrender to stupid ignorant drones spouting moronic bullshit.

WillyGroper's picture


Just one thing, a well armed populace.

barliman's picture


Tell you what, Mr. Zell who feels:

ZELL: I guess my feeling is that he’s right. The 1 percent are being pummeled because it’s politically convenient to do so. The problem is that the world and this country should not talk about envy of the 1 percent. It should talk about emulating the 1 percent. The 1 percent work harder. The 1 percent are much bigger factors in all forms of our society.

You publish ALL of your economic dealings for the last decade, every trade made in the open and dark pools including every time some quant with a HFT colocated server took advantage of a corrupt SEC/CFTC, all bank accounts you have access to whether they are in your name or not and the audit trail of WHERE that money came from and, just for shits & giggles, let's have an independent audit/analysis of HOW MUCH money you have made from the combined QE's and ZIRP.

If the combined money you've made by having 1%'er access to all of these EXTRA opportunities does NOT exceed $ 100 million USD, we will all line up outside of CNBC's studio to publicly kiss your ass and beg your forgiveness.

If it is one red cent over the $ 100 million USD mark, you'll take a loaded handgun and blow out your brains on live TV.


Keyser's picture

Money has no ethics. 

knukles's picture

In the femacamps all they take is military script

aka_ces's picture

"business ethics" - you can find courses in this at some (many?) universities.

aka_ces's picture

And of course "money doesn't talk, it swears"

Bananamerican's picture

"The 1 percent work harder"

notice how they never say, at what?...

rockface's picture

And you will never find out until you try.

Too Big 2's picture

Zell's a real estate guy not a banker, politician, or CBanker you f...tard.  Your email is best saved for the Jamie Dimon's, Pelosi's, Bernake, etc's. 

WillyGroper's picture

I seem to recall something of real estate in 2008.

Hmmm, what was it?

Hmmmm, or was that the 90's?

I forgot.

unrulian's picture

the .1% took their factories, taxes and shell corps offshore and left the 99.9 with Wal-mart and Target and no work. Yes, anyone can start a business pressing someones pants but when an economy that produces nothing but service and low end retail fails in the shambles the .1% left us in...well, you reap what you sow Zell.

WillyGroper's picture

Hopefully, he'll join the party.

In the short rows.

DoChenRollingBearing's picture

Mr. Zell nails it.  Hatred of the rich and Socialist Medicine are very damaging to our country.  America used to be pretty damn free, now, not so much.



OK, I concede that the 0.01% (the banksters/oligarchs) are worthy of contempt.  But, what has happened to working hard on your start-up?  Nothing is (should be) wrong with that.  You should be allowed to get rich if you bust your butt and add the value.

James_Cole's picture

Yeah 'merica has always been a bastion of freedom and economic liberty.

It's also a totally false argument that there's a big group of people out there who are against those who work hard and become wealthy doing so. 

DoChenRollingBearing's picture

I cannot dispute you, James, that America has made many horrible mistakes.  Our country certainly has, that is incontrovertible.

I believe, however, that there is a "Culture of Envy", being actively encouraged by Obama and his minions that do indeed work against those who would get rich by working hard.  Why is it that small business is being skewered?  I have given up on starting a business in this country (as I have mentioned before).  NO WAY I am going to bust my butt and deal with the paperwork, licenses, bureaucrats and aggressive lawyers.

DoChen is an Ex-Entrepreneur here.  I'm out.  I will no longer "work" either.

I pushed the "AMF Button" years ago.

James_Cole's picture

Why is it that small business is being skewered?  I have given up on starting a business in this country (as I have mentioned before).  NO WAY I am going to bust my butt and deal with the paperwork, licenses, bureaucrats and aggressive lawyers.

I'm doubting WMT wants to compete with a bunch of small businesses, who does .gov work for to your mind? 

And after you've got through the paperwork on your small business, how about the banks? The same TBTJ banks that you must deal with who incidentally squashed the small banks via TARP. My sense is supporting small business is a benefit to no one who matters. 

Every country has good and bad history, but looking on it a bit too rose colored distorts the present. 

Bendromeda Strain's picture

Besides that, Mom and Pops' are way too often conservative Chamber of Commerce douchebags!

/Michael Moore

Augustus's picture

The Culture of Envy results from the only tactic ever used by a Community Organizer.

It always requires the Demonization of the Others, who ever they may be for whatever cause.

When I read that Obama told one banker that he, Obama, was the only one keeping the crowd with pitchforks away from him, the crowd that Obama created, I get a better understanding of Community Organizers.  Of course they don't have to understand anything about the business or what those Others actually do or did.  The Organizers don't have to have a clue about what is necessary to make any changes or the follow on effect.

"We.  Want. Something. Here. NOW."  They don't care one bit where it comes from.

TruthInSunshine's picture

Zell is one giant red herring on this topic, and I say Fuck You! unto him for it.

He is clinging to the issue of the 1% being allegedly maligned (I won't address that, because it falls into the trap I speak of), when he fails to discuss the fact that the Federal Reserve in concert with the Treasury Department are actively engaged in a ginormous bubble blowing scheme - AGAIN - that further distorts markets (massively, to the point of breaking them), misprices every asset class, completely warps price discovery, artificially suppresses interest rates and the price of the use of money, and leads to literally dozens of other seriously adverse economic and financial cancers.

Why doesn't Zell give his opinion of the Bernanke Monetary Legacy, which is the real critical question (crisis) of our time?

Fuck You, Zell, you fucking diet coke drinking midget!

OH10DESERTER's picture

Ms. Horsemouth never asked how he felt about the economic consequences of the actions you speak of.  Do we really need people like Zell coming out and stating that?  We already have Rogers, Paul, and Faber.  What we need is some fly ass chicks to come out and say it.  Maybe hold Clooney at gunpoint and make him speak of these things.  Another frumpy old dude speaking his mind will not persuade the 'Mericans.

Augustus's picture

Zell does complain that assets are overpriced.  He does not directly ascribe it to Old Ben, but that is plainly the cause.

WillyGroper's picture

One of these days the 1% whiners are going to yell wolf/nazi one time too many & someone real hungry & homeless is going to get his belly full & it ain't gonna be full of food. 

They're scared, that's why the SOS is getting parroted. 

No one is convinced.

zaphod's picture

A very selective list you got there. Pales in comparison to what many other societies did at the same time (and still happen today). 

If you are going to talk about Japanese Internment, why don't you talk about the millions of Chinese and Korean girls forced into sex slavery by the Japanese at the same time? America wasn't great, but this is not comparible. I lived in Korea for 4 years and the memory of the Japanese camps has not faded, nor should it. There are still Koreans living in Japan who went through this and even today the Japanese have marches in Tokyo saying to kill these Koreans who were brought into Japan against their will, this is today. Could never imagine in the US.

And way to push a false racial element with your depression photo. Last time time I checked Americans of all colors had it hard in the depression and many of all colors went to food lines, including my sicilian grandparents who were considered the blacks of europe. But no, you would rather push false racial accusations that are not true to keep people divided. Why don't you go run for one of the D or R parties, you'd fit right in.

James_Cole's picture

It wasn't a comparison, simply pointing out that America has always had the good and the bad. 

zaphod's picture

And my point is the ONLY thing that is discussed today or taught in schools are the negatives of America.

What is never discussed or taught are the positives of America or the horrible things other peoples have done. 

Without this balance of perspective America is being torn appart while simultaneously losing all the attributes of independence that did make it great. We are not building on the past (keeping the good while improving the bad) to make a better place, instead we are tearing down the past to create something entirely new that looks to be worst IMHO. 

Continous unbalanced attacks on America is what is dividing the country and will be its downfall eventually.

aka_ces's picture

The natural "rival" of the US was the indians, so successfully vanquished that they became harmless American lore.  

"Black power" didn't become a "problem" until almost 200 years into US history, or ~465 years after Columbus arrived in the "new" world.  

Up until the 1950s, the US did not have to deal with unresolved historical conflcts/hatreds with any rivals of comparable power.  And so the kinds of mistreatment that the Japanese visited upon other Asians did not occur; the American population was not primed for it.  This is quite different than in many other parts of the world.  In this respect, the American experience is exceptional indeed.

zaphod's picture

Interesting perspectives. 

However in the early 1900s there were zero unresolved historical conflicts or hatreds between the Japanese and Koreans. Despite their closeness there was little interaction between the nations, so this is not responsible for the "kinds of mistreatment" that the Japanese visited on others. (Japan was largely closed and the Koreans denied the existance of nations farther than Japan or China, there is a facinating story BTW of dutch saliors stranded in Korea who took decades to escape)

rockface's picture

There is no such thing as Black Power in America.  There are a lot confused whiny wimpy ignorant losers who have given up on strivng in life and are desperate for someone else to take care of them.

boogerbently's picture

"It's also a totally false argument that there's a big group of people out there who are against those who work hard and become wealthy doing so."



That HUGE group of people is called the Democratic party.

Where have you been the last 6 years?

Dollar Bill Hiccup's picture

Rich is good. Filthy rich, you've got bodies in a mass grave somewhere.

Stop the rich from getting rich? Never.

But how about jobs for the common man?

And not working at Wall Mart.

The rich have gotten filthy so buy piggybacking off of obscene numbers of illiterate, impoverished 3rd worlders.