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He's a Republican, a Wall Street financier, and a supporter of 'Medicare for all'

By Laurence Darmiento, Los Angeles Times on

Published in Home and Consumer News

When it comes to money managers, Scott Minerd is unconventional. After stops at Merrill Lynch, Morgan Stanley and other big financial firms, the Wharton grad left Wall Street behind at 37 and moved to Los Angeles to enjoy, he says, a better lifestyle and pursue other business opportunities. He found one soon enough. Minerd joined what would become Guggenheim Partners — a familiar name in Los Angeles because the financial services firm's chief executive, Mark Walter, owns a piece of the Dodgers.

Working out of an office in Santa Monica that overlooks the ocean, Minerd, 61, is Guggenheim's chief investment officer, overseeing more than $233 billion of assets under management. His investment acumen has turned him into a Wall Street commentator — but he's also a bodybuilder and evangelical Christian whose perspectives on topics such as income inequality, the Green New Deal and the social safety net don't necessarily jibe with what you'd expect from a Republican investor. Minerd recently spoke to Times editorial staffers. His comments were edited and condensed for space and clarity.

Q: The stock market is booming, yet the unemployment numbers don't look good. Have we seen the worst of the damage?

A: The worst is yet to come for Main Street. A lot of jobs in retailing are never going to return. We had way too much square footage in retail space relative to our population. There are other small and medium-sized enterprises that are just not going to come back. As a reminder, more than 50% of all employment in the United States is in small- and medium-sized enterprises. What's going to happen here is we are going to create a structural underclass that is either chronically unemployed or is employed at wages substantially lower than the wage they were employed at prior to the downturn. This is just going to continue to exacerbate the long-term trend that we've had of wealth and income inequality.

Q: Why are you so certain of that?

A: If you look at the level of output in our economy today and you go back to a little over a year ago, where we were at this level of output before, the unemployment rate today is meaningfully higher than what the unemployment rate was at that time, like more than two times. That's showing you that businesses have focused on becoming more efficient and more productive — that with consumers buying more stuff online you don't need as many people working.

 

Q: Do you place much stock in the gig economy, such as working for Uber, in providing some relief?

A: A large percentage of these people are doing it to supplement their income, and if you actually figure it out, which most people don't, or at least I don't think the average person understands, is that the amount these people are earning is the equivalent of probably like the depreciation and service of their automobile. So if you are unemployed, or you are marginally employed, and you need income and you'd like to monetize the value of your automobile by being a driver, it's a great way to turn your asset into cash. That doesn't really sound like a fair economic deal to me.

Q: How did you vote on California's Proposition 22, which exempted gig transportation companies such as Uber from classifying workers as employees, rather than independent contractors?

A: I am an overseer of the Hoover Institution, right? I favor free enterprise and support free enterprise, but there is a difference between free enterprise and exploitation. I voted not to exempt these people. I think they should be treated like employees and paid a wage.

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