How Greenwich Republicans Learned to Love Trump – The New Yorker

How Greenwich Republicans Learned to Love Trump  The New Yorker

Around town, Morgan Stanley executives no longer competed to wear the cheapest wristwatch. (The current chairman and C.E.O., James Gorman, is celebrated on watch-enthusiast blogs for a rare Rolex that can sell for seventeen thousand dollars.) Jack Welch, who succeeded Reginald Jones at G.E., retired in 2001 with a record severance package of more than four hundred million dollars. One of Jones’s friends, the investor Vincent Mai, was dismayed that many business leaders put short-term interests ahead of long-term vision. “The culture changed into grabbing as much as you can, as quickly as you can,” Mai, the founder and chairman of the Cranemere Group, told me. “Restraint just seems to have gone out the window.”

The money physically redrew Greenwich, as financiers built estates on a scale once favored by Gilded Age railroad barons. The hedge-fund manager Steven A. Cohen paid $14.8 million in cash for a house, then added an ice rink, an indoor basketball court, putting greens, a fairway, and a massage room, ultimately swelling the building to thirty-six thousand square feet—larger than the Taj Mahal. In a final flourish, Cohen obtained special permission to surround his estate with a wall that exceeded the town’s limits on height. It was nine feet tall.

When the tide began to turn against Wall Street, you could follow it from my family’s front door. Up and down Round Hill Road, neighbors became known for one imbroglio after another. If you took a right turn out of our driveway, you could wander by the stone Colonial house of Walter Noel, a money manager with a gracious Nashville accent, who funnelled billions of his clients’ dollars to the grifter Bernie Madoff. (Noel claimed that he, too, was duped.) If you turned left, you reached the estate of the hedge-fund manager Raj Rajaratnam, who once celebrated his birthday by flying in Kenny Rogers to sing “The Gambler” over and over, until Rogers finally refused. In 2009, Rajaratnam was arrested as part of a stock-cheating case that the F.B.I. called Operation Perfect Hedge. He was given a sentence of eleven years in prison, the longest ever for insider trading. Eventually, so many neighbors were ensnared in financial scandals that a local blogger nicknamed our street Rogues Hill Road.

In truth, nobody was shocked that the vast new fortunes of the Gold Coast contained the seeds of financial catastrophe. In the run-up to the 2008 crisis, William Wechsler was a managing director at Greenwich Associates, a consulting firm, where he saw financiers taking ever-larger risks. Historically, the bylaws of the New York Stock Exchange had required trading firms, such as Goldman Sachs, to be private partnerships. “When it was time for you to go, you sold your share to the next generation,” Wechsler told me. “It was culturally acceptable to get to a certain level of success and retire happy.” But, by 1999, the rules had changed, the big banks had become public companies, and investors expected large returns. Hedge funds and other firms made huge bets, in pursuit of dramatic windfalls. Instead of directing most of their capital to funding businesses that hired people and made things, the financiers in New York and Connecticut had become an economy unto themselves. “Every year that goes by, more and more of the added value in our society goes toward capital, and less and less toward labor,” Wechsler told me. “What you end up with is a very unstable society.”

On top of that, Wall Street was hiring lobbyists to dismantle regulations that protected the country from an economic fiasco. In some cases, Greenwich residents led the big banks that lobbied for destructive changes. John Reed was a co-chairman of Citigroup, and William B. Harrison, Jr., was the chief executive of JPMorgan Chase. Their banks were two of the largest contributors to Senator Phil Gramm, the Texas Republican who engineered a ban on the regulation of over-the-counter derivatives. Later, the government’s official autopsy of the collapse called that ban “a key turning point in the march toward the financial crisis,” because “derivatives rapidly spiraled out of control and out of sight.”

As the economy quaked, the shock waves reverberated through politics. The Tea Party movement raged against Obama, taxes, and social-welfare programs, helping Republicans to greater gains in the 2010 midterms than in any congressional election in six decades. Even in Greenwich, where people are not quick to hoist placards, Tea Party activists protested in front of Town Hall, and the first selectman Peter Tesei, the town’s top elected official, joined in. “Liberty has contracted today because the role of government has expanded,” he told the crowd. (Tesei, like many of his ideological allies, later pledged to support Trump.)

The sentiment was a familiar one—even the Romans resented their taxes—but Greenwich was not traditionally known for absolutism on the subject. In the nineteen-eighties, Lowell Weicker, a Greenwich Republican who had served as first selectman and gone on to the U.S. Senate, became known in Washington for blocking Reagan’s attempts to cut spending on health and education. In 1991, after Weicker became governor, he imposed Connecticut’s personal income tax, which was so unpopular that protesters cursed and spat at him. In a speech that fall, he said, “Respect—if not reëlection—comes from speaking the truth.”

But, to some in the current generation, especially Greenwich’s new concentration of libertarians, a fiercer resistance to taxes and to government was a matter of moral principle. Cliff Asness, a billionaire who runs AQR Capital Management, was among the most vocal. When Governor Andrew Cuomo, of New York, discussed raising taxes on hedge funds, Asness tweeted that he was a “flat out lying demagogue,” who was trying to run a “gulag not a state.” Around town, the expectation that a person of substantial means might pay substantial taxes no longer held sway. That became especially clear in 2013, when Thomas Foley, a Greenwich private-equity investor, ran for governor. He owned a yacht, a number of vintage cars, two British fighter jets, and a house that Greenwich Time likened to “the Hogwarts castle.” But, on tax returns that he showed reporters, he had claimed so many investment losses and alimony payments that his federal taxes amounted to six hundred and seventy-three dollars that year. (Foley lost the race.)

Charles Rossotti, a Republican businessman who served as the commissioner of the I.R.S. from 1997 to 2002, has estimated that sophisticated tax ploys and shelters cause ordinary citizens to pay an extra fifteen per cent in taxes each year. Brooke Harrington, an economic sociologist at Dartmouth, told me, “Some of that shortfall just never gets made up. Those are roads that don’t get improved, public transport that doesn’t get built, schools that don’t get fixed.” Connecticut has the richest one per cent of any state, but, according to several studies of crumbling infrastructure, its roads are among the worst in the country.

Harrington said, “For an earlier generation, even if your heart wasn’t in it, you’d say, ‘I’ve got to join the local charity board, to project that I deserve this wealth.’ ” The current generation, instead of focussing on the local charity board, prefers targeted private philanthropy, bypassing public decisions on whom to help and how. “The underlying massive change is that wealth no longer needs to justify itself—it is self-justifying,” Harrington said. “I look back, and I think, That’s when we gave up on being a ‘we.’ ”

In the political ferment brought on by the Tea Party and the resistance to Obama, conservative donors expanded their influence. The Hanleys became funders of Turning Point USA, a nonprofit, founded in 2012, that promotes conservatism in high schools and colleges. More important, Allie Hanley helped its founder, Charlie Kirk, meet other donors. “Allie Hanley opened the entire southern corridor for us,” he wrote later. Kirk is now a conservative celebrity and the chairman of Students for Trump, a campus political network. In recent years, Turning Point has faced multiple controversies. Some student governments have sought to ban it for interfering in their elections; staff and members have been discovered making racist comments. Last year, a video showed Riley Grisar, the head of a Turning Point chapter in Nevada, saying “white power,” with his arm wrapped around a woman who said, “Fuck the niggers.” (Grisar was removed from the organization.)

Source: newyorker.com

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