Yahoo Finance Unity will come when people ‘feel it in their pockets’: former Citigroup chairman
The siege of the Capitol by supporters of President Donald Trump this week captured the nation’s deep political divide in dramatic terms: 45% of Republicans supported the break-in, while just 2% of Democrats did, according to a YouGov poll of 1,397 registered voters released on Wednesday night.
In a new interview, former Citigroup chairman Dick Parsons, who also served as Time Warner CEO, attributed the political division to rising wealth inequality that has shut out many Americans from access to “prosperity,” adding that tensions will dissipate when people “feel it in their pockets.”
“If we owe Donald Trump anything, we owe him the fact that he revealed how large and how dissatisfied that group of people were,” Parsons said. “Those people have to be made to feel like they are included in the prosperity of the country.”
“It's going to take a regeneration of prosperity spread more equally,” adds Parsons, who served in some fashion every Republican president from Gerald Ford to George W. Bush, and as an economic adviser to Barack Obama amid the financial crisis.
The growing gap between the rich and the poor
Billionaires in the U.S. added $1 trillion to their net worth during the coronavirus outbreak, according to an Americans for Tax Fairness analysis released in December. That wealth accumulation has occurred while tens of millions of workers have lost their jobs, exacerbating inequality that had already reached heightened levels before the pandemic.
The growing gap between the rich and poor in recent decades has caused state legislatures to move rightward and widened the ideological distance between left and right, according to a 2015 study released by Nolan McCarty, a professor at Princeton University. The study found that states with the fastest growth in inequality have tended to show the most political polarization.
Meanwhile, a study released by the World Bank last April found that in European countries worsening inequality has driven support for far‐right parties among older people.
The call to address wealth inequality has gained urgency among economic titans over the past year, drawing concern from the likes of former Fed Chair Janet Yellen and JPMorgan Chase CEO Jamie Dimon. Last August, a call to address income disparity was issued by an association of CEOs at major companies called the Business Roundtable, which Dimon led as chairman from 2017 to 2019.
“There is obviously a fairly large group of folks who feel they've been left behind — left out — in terms of the prosperity of this country,” Parsons says. “And they probably have.”
Parsons spoke to Yahoo Finance Editor-in-Chief Andy Serwer in an episode of “Influencers with Andy Serwer,” a weekly interview series with leaders in business, politics, and entertainment.
Known for leading organizations through crisis, Parsons took over as chairman of Citigroup in 2009 after the financial crash, and he became interim CEO of the Los Angeles Clippers in 2014 after the league removed owner Donald Sterling.
He also helped rejuvenate the Apollo Theater over more than two decades on its board of directors, from which he stepped down last month.
Parsons called the issue of a how to address political polarization the “$64,000 question,” saying that President-elect Joe Biden “may be the guy” who can help bridge the divide.
“Can this country come back together? I hope it can,” Parsons said. “I think it can.”
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