Morris Pearl
"We don't want to live in a country with few rich people and many poor people because that is not the country where we can make money"
Morris Pearl was a director of BlackRock and today leads Patriotic Millionaires, a group of tycoons who believe that inequality is not business and work to reduce it. In-depth dialogue with LPO.

Morris Pearl currently serves as Chair of the Patriotic Millionaires, a group of hundreds of high-net-worth Americans who are committed to "making all Americans, including themselves, better off by building a more prosperous, stable, and inclusive nation." The group focuses on promoting public policy solutions that encourage political equality, guarantee a sustaining wage for working Americans, and ensure that millionaires, billionaires, and corporations pay their fair share of taxes.

Previously, Mr. Pearl was a managing director at BlackRock, one of the largest investment firms in the world. Prior to BlackRock, Mr. Pearl had a long tenure on Wall Street where he invented some of the securitization technology connecting America's capital markets to consumers in need of credit. Based in New York, he likes to ride his bicycle around the city. In an exclusive dialogue with LPO, Pearl talks about the principles of the millionaires, the US inequality, the speeches at the WEF2024 and evaluates this year elections. In addition, he explains who support politicians and their relation with reach people.

What is Patriotic Millionaires' mission? What is your work?

Basically, we have hundreds of rich people, the patriotic millionaires, and we believe that gross inequality is not good. We don't want to live in a country with a few rich people and lots of poor people, because honestly, that's not the kind of country we can make money and build businesses and do things, and that's not where we want to raise our children and grandchildren. And so we're trying to change the policies here in the United States mostly, but we also have people in the United Kingdom and a few other countries trying to use the resources we have to change the policies of our government to reduce inequality.

In your Linkedin profile you wrote: "Working on policy and politics in order to provide for my children the kind of nation where I grew up." What was it like?

Well, I'm 64 years old. So when I was growing up in the 1960s and 70s, my father and other relatives owned a family business. It was small stores in little towns all over the very north of the United States, near the Canadian border. And so all of my aunts and uncles were managers of these little stores in these little towns. But the people who lived in the towns had enough money to shop at the stores and buy new shoes and dresses when they had weddings, and buy shoes when they got to be in the basketball team and things like that. Our family made a good living. We weren't rich, but we never had a lack of money, at least that I could discern. It was the kind of opportunity that people had. They didn't start off with a huge amount of capital. 120 years ago, my grandfather's family came from Eastern Europe. People were working in factories and as peddlers, like door to door selling stuff, pushing a cart around the town and selling stuff. Eventually, some people made enough money to have a store in a fixed location. And then they started opening stores in all the little towns because they were able to save up enough money to do that. But all of that happened because there were people who could spend money. All the farmers, all the workers, the school teachers, the school bus drivers, they all made enough money so they could buy new clothes occasionally. And anyway, that's how I grew up. With a government that imposes policies of austerity upon large parts of the population, it doesn't work.

We don't want to live in a country with a few rich people and a lot of poor people because, honestly, that's not the kind of country where we can make money, create companies and do things. And that is not where we want to raise our children and grandchildren.

Are you talking about Biden's government or any other?

Well, I was thinking of the previous government, or your new government in Argentina, that wants to sort of almost say that the poor people are the enemy, but that's not the case. Here in the United States we have many people who are relatively recent immigrants to our country, especially here in New York. And those people are an important part of our economy. They do the work. They make money. They buy stuff. They shop in the stores, they eat at the restaurants, they drink at the bars. And we need those people. They're not the enemy. They are our customers, our constituents, our friends, our neighbors, our families. And so if we're being told, "Oh, immigrants are bad, they're destroying the blood of our nation," I mean, that's just the wrong way to go. It's not the way I want to go. I'm not going to talk about morality of what's right and wrong, and I'll leave that to the priests. But I will tell you that I don't want to live in a country where we're saying that some of our neighbors are our enemies.

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How many members are there? Why do people want to be part?

A little over 200. Because they share my concern.

Do you have a recruitment program or something like that?

We have a development director and a deputy who try to recruit new members. So they call people every once in a while and ask them to join. It's not like a hugely active program, but we mostly recruit people for word of mouth. People meet people. "Oh, what do you do? Oh, I do this, I do that. I'm in this organization, that organization kind of thing." People meet each other, and a lot of our members are active in politics and so go to political events and occasionally meet other people. You know what I mean? There might be a dinner for a congressman or something, and we meet other people who have similar views.

But the organization is non-partisan, isn't it?

Well, technically not. Although I would say that 99% of our members are to the left. You know what I mean? It's not formally a partisan organization, but our views are pretty much the views of the left.

"We don't want to live in a country with few rich people and many poor people because that is not the country where we can make money"

A recent international poll of millionaires found: 75% support higher taxes on wealth; 52% think extreme wealth is a threat to democracy; 72% think extreme wealth helps buy political influence.

Yes, I agree. I think they are right.

At Davos, the message of Patriotic Millionaires was "Elected leaders must tax us, the super rich. We'd proud to pay more." What do you think, for example, of Argentine President Javier Milei's speech at Davos?

I didn't listen to him, but I did read the speech. I disagree with his basic premises. I disagree that it'll be a good thing to privatize many public things. I disagree that it would be good to reduce the subsidies for the poor people. I disagree with a lot of what he has to say, because I believe the policies that he is supporting would increase inequality, would decrease the disposable income of a huge number of people in Argentina. And even the rich people, I don't think they would benefit that much. Think about the richest person in Argentina, the guy who started the payment company Mercado Libre. I've invested in it. How do they make money? They make money by lots of people doing small transactions and buying stuff. If people can't afford to get to work because the bus costs too much, they're certainly not going to have any money to buy stuff on Mercado Libre. If the middle class people are getting poor, they're not going to be able to buy airline tickets, they're not going to fly. So the richest people have businesses that depend on large middle class population, of people who are buying stuff and spending money. Maybe the oil sector is different, but every other part of the economy, except for extracting oil from the Earth, every part of the economy depends on people who are able to spend money. I think that President Milei is just incorrect in his ideas that by imposing austerity on the poor people, that will somehow make more money for the rich people. No, it will make less money for everybody, make people unhappy and sad, and they'll be marching in the streets, probably.

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A few years ago you wanted the United States imitate Argentina by copying the wealth tax. They were post-pandemic times. Why were we an example?

One issue here in the United States is that our main tax is an income tax. Income means money you make from your job or your investments and things, but it's sort of narrowly defined by only when you sell it for workers, whatever money they make, it's pretty clear. Money is deducted from their paycheck every week. For investors, it's less clear because it's only when you sell something and then you look up how much you paid for it and calculate the difference and pay percentage of that as a tax. But if you don't sell it, if you borrow money or something or you simply spend the money you already have, you don't have any incomes. You don't have any tax. And that's part of the reason why the very richest people here in America pay virtually no income tax. But if you think about it, it makes sense. If you're already rich, you don't need any income. So that's why we believe that we need a tax on one form or another. A tax on wealth, whether you call it wealth or unrealized gains or some other means. But we need to have a tax that the very rich people pay based on how rich they are. That's what we believe.

We believe in campaign finance reform, and maybe if our politicians didn't have to spend all of their time talking to rich people about making campaign donations, they would look at things a little bit differently.

You center your work on Equal Political Representation, a Livable Minimum Wage and a Fair Tax system. How do you achieve all that? Is a restructure of the American tax system possible?

We're looking at a couple of things. Part of it involves electing different people to our government. We believe that if we make our politics more open, then we will get different people in office. Part of our issue is that running for office in the United States, anyway, is very expensive. And so the people who run for office. In many case, it varies from person to person, but in many cases, they spend a lot of time calling people asking for money. Who do they call? They call rich people, because calling poor people and ask for money doesn't do any good. And so they spend a lot of time talking to rich people. Believe me, I know. And that's part of the problem. So, one thing we're believing is in campaign finance reform, and maybe if our politicians didn't have to spend all of their time talking to rich people about making campaign donations, they would look at things a little bit differently. So we think that will help. We're also in favor of raising the minimum wage. We have a minimum wage law here, but it's not been changed for many years. And so the minimum wage, adjusted for inflation, is far lower than it used to be, and we're in favor of making the tax code more fair. Currently, investors pay lower tax rates than people that work. And so if you're already rich, you tend to get richer. But if you're not already rich and you're working, you tend to get poorer because you pay higher taxes than the rich person does. Higher tax as a percentage. And so those are the three main areas we're working on. And all three of those could potentially help alleviate the gross inequality that we're seeing.

Milei's policies will increase inequality and even the rich would not benefit as much. Think about the richest person in Argentina, the guy who founded the company Mercado Libre, I have invested in it. If the middle class is getting poorer, they will not have money to buy in Mercado Libre.

In a tense global context, where do you think the United States is going toward? Is the country declining?

Oh, I don't mean we're a huge country. We have lots of people who want to come into the United States, not go out. So I think we're doing okay. I can't predict too far in advance, but I do think that more people from outside the United States want to come in than who are inside want to go out. So I think the United States is still seen as a good place to be for people who were looking for a good place to live.

At the start of the year, Wall Street is listed on the rise after greater than expected growth in the United States economy.


And what does it mean?

Well, I don't really look at it every minute over the long term, it always tends to go up. If you look at it over years, it always goes up. So there's nothing particularly unusual about the current time. And, yeah, I mean, big companies are making more money than they used to make. That's always true. For my grandparents generation was the railroads, and then there were plastics and tech companies and every other kind of thing. And, yeah, big companies are always. Big companies are making more money, and inequality is getting worse. Part of that is because the tax rates on companies are lower than they used to be, and so they're accumulating more profits, more to be reinvested. So we think that companies should also pay higher taxes than they currently do. But, yeah, inequality is getting worse in our country.

Pearl, in the United States Senate Finance Committee.

How do you evaluate Biden's administration so far? Do you think he'll be the Democrats' candidate?

There is a difference of opinion between the Congress and the president of what should be done. And so they're only able to do what's in the overlap, what's in the intersection, which is not all that much. I think he personally is doing great, but he doesn't have the national backing to do some of the things he wants to do. And we don't have to agree on every issue. I don't claim to agree with the president on mean, no two people agree on Trump. Overall, I think he's doing a good job.

Donald Trump is winning most of the States. What do you think will happen in the primaries? Do you think Trump is going to be the next president?

Well, I think in the primaries he's going to be the head of the Republicans. But I predict that once again, Biden will win the general election in November.

Why BlackRock and other Wall Street (like J.P. Morgan) giants are getting closer to Trump? Do they finance Trump as they did with Biden in 2020?

Well, it's not the big companies financing anybody. It's the people, individual people who are doing the financing. You can give $2000, $3,000 to your candidate and tens, that rich people give more than other people. I don't really think that somebody's work is necessarily indicative of their politics. People can work for Blackrock and be in the left or on the right. And the same with J.P. Morgan, the same with any company. So I don't really think of looking at campaign donations by the employer of the donor is necessarily that interesting.

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In his annual "Letter to CEOs", Larry Fink wrote that stakeholder capitalism "is not about politics. It is not a social or ideological agenda. It is not ‚Äėwoke.' It is capitalism, driven by mutually beneficial relationships with the employees". Do you have a personal relationship with Fink?

I don't know Mr. Fink. Well, I've met him a few times... I worked there for some years, but not directly. I don't have a personal relationship with him. I've had maybe four conversations with him in my life, maybe five. I'm not sure exactly. But I think that it's good. I mean, I think if you're running a business, you and your society will both be better off if you treat your employees respectfully, if you pay them enough to support their families. So I'm in favor of capitalists who do things like treating their employees well. I don't think that's a bad thing at all. Some of these terms are thrown at woke. A lot of people say, "Oh, woke, that's evil." But you ask them, what does woke mean? Don't really know. And vice versa. I tend not to use buzzwords like that too much, but I'm in favor. Our next book we're working on now is called Pay the people, and it's basically about how raising the minimum wage is good because the workers who make enough money to live on and commute to work are better workers as well as participants in the greater economy. So, yeah, we're in favor of employers treating workers well.

I don't think that somebody's work is necessarily indicative of their politics. People can work for Blackrock and be in the left or on the right. And the same with J.P. Morgan or any company. So I don't really think of looking at campaign donations by the employer of the donor is necessarily that interesting.

Vivek Ramaswamy, now running to be Trump's vice president, called Fink "the king of the Wokism industrial complex."

I haven't been paying that much attention to him.

You were part of BlackRock in the past.

For almost ten years.

What is the link, the connection between BlackRock and Argentine politicians?

I'm not aware of. I mean, none that I knew at the time I was there. I had nothing to do with Argentina or Argentine politicians.

Some people say that BlackRock supported Milei's campaign in Argentina.

I don't know. I've never been aware of BlackRock supporting any politician running for office anywhere.

Do politicians listen to you?

Yes, they listen. They may not do what we want, but they do listen. Very few people turn down a meeting with the chairman of the group with the word millionaire in his business card.

What do they say?

Some of them are totally on our side, Katie Porter, Maxine Waters, Ron Wyden. We have certainly not a majority, but we have a bunch on our side. And some of them just come up with crazy reasons why they won't do what we want them to do. But if we do this, that will cause some problem in some other area or somebody or something. Sometimes they have excuses of why they don't want to support us. We move on and talk to somebody else.

What do you think of philanthropy?

I give money to various causes, but it doesn't replace taxes, not by any means. Certain things philanthropy is good at. If I want to raise money for a new concert hall, probably do that quickly around here. But we don't just need new concert halls. We also need schools and neighborhoods where poor people live. We also need busses that poor people take to work. We need a lot of things that philanthropy generally doesn't do. Philanthropy is good, but it doesn't obviate the need for people paying their taxes.

Translator: Bibiana Ruiz.

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Morris Pearl fue directivo de BlackRock y hoy lidera Patriotic Millionaires, un grupo de magnates que piensa que la desigualdad no es negocio y trabaja para reducirla. En di√°logo con LPO, habla sobre las elecciones.