Pete Peterson, a co-founder of the Blackstone Group, is retiring from the private equity business and unveiling a new foundation bearing his name. The Peterson Foundation, which will be well-funded and staffed by luminaries like GAO director David Walker and former senator Sam Nunn, will work to promote the idea that entitlement programs cause our nation's fiscal problems, and will address other issues like nuclear proliferation.
As the New York Times reports, there is one problem with Peterson's scolding Americans for enjoying Social Security and Medicare: Peterson himself sees no problem in enjoying government largesse that is provided through the tax code. He has benefited enormously from the tax loophole for "carried interest," which allows buyout fund managers to enjoy the low 15 percent capital gains rate for compensation they receive for managing other people's money. As CTJ has argued in many places, this loophole essentially subsidizes the incomes of millionaires and billionaires through the tax code.
But this type of contradiction is nothing new for Peterson. Back in 1994, CTJ director Robert McIntyre wrote an article in the American Prospect called "False Messiah." He pointed out that the ideas Peterson promoted back then basically came down to (A) slashing entitlement programs that help people to reach and stay in the middle-class and (B) replacing the progressive income tax with a consumption tax that would be a massive boon to the wealthy while increasing the tax burden on everyone else. A consumption tax would make income from wealth and savings entirely tax-free. That's the sort of income rich families have a lot of and poor families have none of.
Nonetheless, Peterson had a remarkable ability even then to present his ideas as advice that would save the middle-class. It will be worth watching his new foundation to see whose interests it really serves.