Last week, we introduced you to our take on “The Tale of Two Billionaires.” For this week’s Closer Look, we want to take this story wider, and look at the billionaire class as a whole.
There are only about 735 billionaires in the United States, but despite the fact that they could all fit on a single Airbus 380 jet, this group holds an immense amount of wealth and, therefore, power, in the United States, and should be subject to intense scrutiny.
Some welcome the public’s attention, some use their wealth to hide from it, but as a group, when faced with a real examination of who they are and what kind of impact they have, virtually all billionaires disappoint. Billionaires like Yvon Chouinard, the founder of the popular outdoor apparel company Patagonia who made a big splash in the headlines when he gave his entire company away to a trust and nonprofit working to combat climate change, are the very, very rare exception.
The rest mostly fall into three categories. The first are openly awful and actively and publicly advocate for policies that would make our country less equal (the Kochs, Peter Thiel, etc). The second are largely silent on most political issues, but either through passive acceptance of a status quo that benefits them at the expense of the rest of the country, or through active yet secret efforts to sway public policy in their direction (like Barre Seid’s recently-revealed advocacy), they contribute to making the country less equal.
The third group is perhaps the most troubling of all. They are billionaires who say the right things and in many cases give (very publicly with much fanfare) to good causes, but they still contribute to inequality and refuse to address the real substantive issues at the heart of our economy. These billionaires get endless amounts of media attention for how generous and benevolent they are, yet they continue to propagate a system that relies on exploitation and suffering.
They put on a great show about being socially responsible, but when push comes to shove, they don’t do anything concrete or meaningful to aid in the fight for economic justice.
Just look at the poster child for “good billionaires,” Warren Buffett, who, as we laid out last week, is currently embroiled in an ongoing dispute between some of the country’s biggest railway carriers and rail worker unions, and refuses to act to support the workers despite the fact that one of the main railroads promoting inhumane working conditions is owned by his company, Berkshire Hathaway.
Buffett’s inaction in the railroad dispute might come as a shock to many who think of him as the quintessential example of wealthy do-gooders, but it shouldn’t. Buffett’s hypocrisy has reared its ugly head many times over the years. He has long profited from morally-suspect industries, and his philanthropy is, while significant, far from what he could potentially give. In 2010, he signed the Giving Pledge and promised to give away 99% of his fortune before he died, but just look at the math: he was worth $47 billion in 2010 and is now worth $118 billion.
He talks a big game on taxes, but he did nothing to prevent the passage of the 2017 Tax Cuts and Jobs Act, which conveniently made Berkshire Hathaway $29 billion richer. Similarly, he did nothing to champion the 2022 Inflation Reduction Act, or advocate for more aggressive tax hikes on billionaires like himself. And if all that wasn’t enough, Buffett didn’t even bother to show up at the White House when then-President Obama unveiled his iconic “Buffett Rule” tax proposal that he named after the billionaire.
Make no mistake about it: Buffett is not interested in paying higher taxes. He is only interested in the attention that he gets from saying he supports higher taxes on the wealthy. And he’s not the only billionaire who talks a lot about fighting inequality while failing to follow through.
Bill Gates, another high-profile, wealthy philanthropist, says all the right things about economic equity but turns around and acts contrary to his claims. He also signed the Giving Pledge back in 2010, but has since managed to increase his net worth by a whopping $76 billion. He has been MIA from virtually every legislative fight that would give an ounce of sorely-needed financial help to workers across the country. And let’s not forget that Microsoft, Gates’s brainchild, faced serious antitrust allegations back in the 1990’s. To put it plainly, despite his philanthropy, Gates is not a friend to working Americans.
George Soros is another player making up the ranks of the “socially responsible” billionaires. Over the years, he has established himself as one the world’s greatest philanthropists and one of the top donors of liberal campaigns and causes in the US. He even talks about how important it is for the government to raise taxes on the rich and to tax wealth. But based on our experience working in the progressive tax space, for such a big spender, very little of Soros’s money actually goes towards backing up his words on taxes.
Last but not least, Steve Schwarzman. Schwarzman has expressed concerns over income “insufficiency,” and says that he wants to help working people earn more, but his comments are nothing but smoke designed to distract from the impacts of extreme wealth, and discourage lawmakers from taxing him and his peers. Schwarzman is the CEO of Blackstone, a private equity company that has been known to run businesses to the ground and destroy workers’ livelihoods in the process – if he is so concerned about low wages, he should start looking at the effects of his own company. Schwarzman has publicly opposed a wealth tax, and as someone who earned a whopping $1.1 billion in one year from private equity, benefits hugely from the carried interest loophole, which he has fought to defend.
These billionaires want public adoration, but the truth about them and their peers is simple: if we lived in a country with a level playing field – if the minimum wage was a living wage, if unions were not under attack, if rich people like us paid what we owed in taxes – then we simply would not have 735 billionaires to speak about in the first place.
This is what makes Chouinard’s example so remarkable. He didn’t just give generously: he gave almost all he could while directly addressing the fact that his wealth itself was inherently suspect. He and his family showed they understand that “every billionaire is a policy failure,” and that they should not be able to amass millions of years’ worth of money in one lifetime. (When Chouinard learned that he made the Forbes billionaire list, he was reportedly angry!) Most importantly, however, they are committed to doing something about it. They are willing to put their money where their mouth is and risk it all – their reputations, their children’s and grandchildren’s inheritances, and even their entire companies – to bring about change.
We have serious economic problems in America today. Inequality has reached levels not seen in over a century. The minimum wage has stood frozen at $7.25 an hour for thirteen years. Wages can’t rise fast enough to keep pace with record-breaking inflation brought on by corporate price-gouging. Unions are under attack like never before and ultra-wealthy people like us and these billionaires pay far too little in taxes compared to the rest of the country.
The stakes are too great for us to wait for good billionaires to save us, and they’re far too great for billionaires to sit on the sidelines and act like their half-hearted attempts at social responsibility make them heroes. Their wealth gives them a moral obligation to do more, and that means more than just philanthropic giving. It means putting their wealth and influence into backing systemic change that fixes our tax code and unrigs our economy to bring about the change workers desperately need in this country.