Five ground rules for the billionaires club
Early last week the Forbes 400 list was released, and the richest people in the United States were ranked. Bill Gates and Warren Buffett sit at the top of the list, while twenty-somethings Eduardo Saverin and Dustin Moskovitz of Facebook fame appear for the first time. Each of the 400 is worth at least $1 billion, and their leadership impact is impossible to quantify. Collectively these individuals have enormous influence on issues ranging from politics and philanthropy to the economy and business. In another type of article last week, Thomas Friedman continued to implore citizens of the United States to understand where the country is headed and how other nations see us. Friedman says simply that we must all start moving in one direction or the country will continue to falter. Can the rich help lead this effort, and if so, how?
If you've made the Forbes list of wealthiest Americans, chances are you have unprecedented access to the media. Or, in Rupert Murdoch's case, you might own a portion of the media. Rupert's empire includes Fox, the Wall Street Journal, the New York Post, MySpace, DirectTV and major newspapers in the UK and Australia. The "left" has accused Murdoch of using his media empire for his own ideological gains. But if ownership provides a platform, so too does inclusion in the billionaires club. Despite the $700 billion that would be added to the US deficit over the next ten years, Donald Trump recently made the media rounds on Fox and CNN, advocating for extended tax cuts for the wealthy and suggesting that the job-creating rich will leave the United States in droves if the tax issue isn't solved. The larger question is, what do these leaders use their media platforms for? Are they further polarizing the public with fear, uncertainty and doubt, or are they genuinely trying to advance a solution-focused discourse?
Of the top 20 richest people in the United States, 4 earned their wealth from Walmart, 3 got rich from Microsoft, 2 hit pay dirt with Google, and the brothers Koch are reaping the spoils of leading their father's energy and manufacturing empire through the new millennium. In short, 4 companies have produced 11 of the top 20 richest people in the country. With small business suffering, and Blockbuster and other mid-size ventures going bankrupt, big business may be consuming the American landscape. However, where we're going is difficult to say. Walmart has long been beaten up for its negative impact on local commerce, and the energy industries that have produced nearly 35 of the richest 400 are undergoing radical changes in light of growing environmental and sustainability concerns. Does such a concentration of power and wealth contribute to the American Dream, and how might these businesses guide the United States moving forward?
Tim Noah's piece, The United States of Inequality, takes a close look at the current disparity in wealth, which hasn't been this significant since before the stock market crash of 1929. According to Emanuel Saez's updated research, as of 2007 nearly 50 percent of the country's total income went to the top 10 percent of earners (earners of $109,600 or above), and 24 percent went to the top 1 percent. Similarly, the top 0.1 percent (fewer than 15,000 families, and they're making at least $11.5 million annually) account for more than 6 percent of the country's total earnings. In this past year the top 400 shared a net worth of $1.37 trillion, climbing 8 percent from last year, which translates to 2.6 percent of the country's private finances. While the economy's negative impact is holding much of the country by the throat, pushing the poverty rate to a 15-year high and keeping unemployment around 10 percent, the rich are truly getting richer. While there certainly isn't a quick fix, could the country's wealthiest be better leaders in pulling America out of the Great Recession?
In a democracy we all have a voice, but the reality is that our voices range in volume. David and Charles Koch own the majority of Koch Industries, an under-the-radar behemoth that owns oil refineries, Dixie Cups, Lycra and Stainmaster Carpets, among others. Koch industries was also rated as one of the top ten air polluters in the United States, and the Koch brothers "outdid Exxon Mobile in giving money to organizations fighting legislation related to climate change," as Jane Mayer outlines in a recent expose. Most recently, they contributed a cool million to suspend a California climate law. On the left, George Soros was highly critical of the Bush administration and has been identified as a prominent contributor to the Jewish American lobby, J Street, as well as other liberal causes such as Moveon.org. Regardless of what side of the political fence you're on, the country's wealthiest have the potential to bring back some faith and trust to the political system. But does investing in legislation that is simply intended to make someone more money help or hurt our government?
Many of our nation's wealthiest have contributed vast sums of money to various philanthropic causes. By 2007, the Gates Foundation had given roughly $28 billion to causes ranging from education to HIV prevention. Furthermore, Bill Gates and Warren Buffett recently created The Giving Pledge, an "effort to invite the wealthiest individuals and families in America to giving the majority of their wealth to philanthropy. " At this point, there are 40 pledges, with a letter that outlines the reasons behind each donor's decision. Letters from Warren Buffett and George Kaiser seem particularly poignant, providing a unique perspective on wealth and why they would give theirs away. Should the wealthy be expected to give their hard-earned dollars, or is this truly an American tradition that makes this country what it is?
With a media presence and a strong political voice, the Fortune 400 are more than business titans. These individuals can make waves when they want to, but are they focused on making the type of waves that will advance our country and keep our nation out in front? There's no denying that these people are leaders, but are they the type of leaders who are going to keep America driving successfully forward? As always let us know what you think--we look forward to hearing it.
Have idea for what we should write about next? Be in touch at firstname.lastname@example.org or visit us at Meno Consulting.
September 27, 2010; 3:42 PM ET
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