Yahoo Finance has obtained a policy paper written by Carl Icahn on income inequality that the billionaire financier recently sent to Donald Trump and others on Wall Street and in Washington. In the paper, Icahn warns of “dangerous systemic problems that will affect each and every American in the coming years.” The five and a half page paper has some similarities to the video that Icahn is releasing on www.carlicahn.com, but focuses more on imbalances in our society. The paper was sent to Trump before the GOP presidential candidate revealed his economic proposals. “I sent it to a number of people,” Icahn said. “A few of the ideas in the paper are reflected in Donald Trump’s plan. I think that shows what an open-minded guy he is, which is what we need in the White House.”
In the paper, Icahn takes a decidedly egalitarian tone, writing:
“The average worker makes approximately $50,000 per year. The average annual compensation of the thirty highest paid CEOs is approximately $47 million per year. (I don’t believe this disparity was ever this great even in most dictatorships!) You will hear many politicians argue that government should not interfere with the ‘business judgment’, of our companies and, therefore they cannot pass laws to encourage ‘income equality.’ This is completely untrue – the sad fact is that the government has actually passed many laws that have brought about ‘income inequality.’”
In a phone interview with Yahoo Finance Icahn says, "In this country, you talk about the wealth gap and politicians say, 'well, you can't legislate equality,' but we legislate inequality.”
Of all the corporate raiders and junk bond kings that came of age in the 1980s, Carl Icahn has become the richest and most powerful. He shows little sign of slowing down. Now 79, and with a net worth of some $21 billion according to Forbes, Icahn has moved beyond being a fixture of CNBC and the business pages to being something of a general news subject. With unusual tentativeness and nuance Icahn has linked himself to Donald Trump thereby guaranteeing him a place at the grown-ups' table this news cycle. In the recent phone interview with Yahoo Finance, Icahn says that while he admires Trump, (the two worked with each other in the maw of the Atlantic City casino business) the two don’t see eye to eye on everything. Icahn wouldn’t comment specifically on where they disagree. As for being Trump’s Treasury Secretary, Icahn apparently said he would and then retracted that point. “He’s his own man,” Icahn says of Trump.
In the policy paper, Icahn writes about the complicity of CEOs and Wall Street:
“…the American worker is also getting 'screwed' …boards and CEOS have allowed property, plants and equipment of our companies to become the oldest on record and, as a result, the growth rate in productivity per hour of our workers has also become the worst on record and has actually decreased compared to last year. The average age of corporate property, plants and equipment is an astounding 22.3 years, the oldest it has reached since 1941. But I do not believe that most boards and CEOs really give a damn. With many exceptions, CEOs only care about short term results. Perhaps you can’t really blame them because unfortunately, Wall Street judges them based on quarter to quarter results and CEOs receive their egregious compensation based on those short-term results.”
Icahn also writes about CEOs and how hard it is to remove them: “How would we feel if laws were passed that certain criteria had to be met to vote for President and there were no term limits on the President’s ability to serve, thus making it almost impossible to remove Obama? Amazingly, there are many state laws in existence that protect the CEOs that are analogous to the example I just made."
Icahn slams using junk bonds for doing deals, comparing it to drug addiction, writing, “Making acquisitions with junk bonds may increase earnings for the short-term, but this gives companies a short-term high, just as heroin does to their users.”
Icahn closes his piece by again coming back to the plight of the common man versus CEOs: “When it comes time to pay the Piper, CEOs will have taken their bonuses and again the workers will be left, holding the proverbially ‘empty bag.’”
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