How the other 0.000003 percent lives
examines the lives of the 10 richest people in the U.S.--and uncovers a rogue's gallery of serial polluters, budget-slashers, CIA contractors, union-busters and right-wing nuts.
BACK IN February--when even the mainstream media was convinced the capitalist economy was in full-blown meltdown mode--Newsweek magazine ran an article titled "Why there won't be a revolution."
Newsweek wanted to reassure the rich--and convince working people--that the masses weren't getting ready to dust off their pitchforks and head to the town square. "Americans might get angry sometimes," they wrote, "but we don't hate the rich. We prefer to laugh at them."
Newsweek couldn't be more wrong. The 10 percent of Americans who rely on food stamps, the 25 percent of Ohioans who are waiting in lines at food banks, the 500,000 people who lost their jobs last month and the millions more who can't find work--these people aren't laughing.
And plenty of Americans--rightly--hate the rich. While our homes go into foreclosure, while our credit card rates go up, while our jobs disappear and college tuition shoots up, the well-heeled "masters of the universe" on Wall Street are still making out like bandits, but now with hundreds of billions of dollars in taxpayer money, courtesy of the Obama administration.
A lot more people would be even angrier if the mainstream media reported the truth about the rich and powerful in America--who they are and how they "made it" to the top. Consider the 10 richest people in the country as of last September, according to the annual Forbes magazine list.
The Koch Brothers
Charles Koch ($19 billion) and David Koch ($19 billion)
Studies show that the most likely job of any child is that of their parents. If your mom or dad is a janitor, you're more likely to be a janitor than anything else, according to the statistics.
Charles and David Koch are no exception to the rule--only much luckier. Like their father, Fred Koch, they run the largest privately owned energy company in the U.S. Koch Industries--with annual revenues nearing $100 billion--is also one of the biggest polluters in history.
Fred founded Koch Industries in 1940, and during the Second World War, he made a bundle helping the USSR's ruler Joseph Stalin build up an energy infrastructure in his country. After the war, however, Fred "saw the light" and became one of the founders of the right-wing anti-Communist John Birch Society, which helped whip up a hysteria during the McCarthyite witch-hunts of the 1950s.
When Charles and David took over the family business, they also took over dad's right-wing political projects. The Koch Brothers fund a host of conservative groups through the Koch Family Foundations. They founded the pro-corporate libertarian Cato Institute, and David Koch was the vice-presidential candidate of the Libertarian Party in 1980.
The brothers also provide money to Americans for Prosperity, the outfit that helped organize the right-wing "tea parties" earlier this year and that toured non-plumber Samuel Wurzelbacher (a.k.a. Joe the Plumber) through Pennsylvania to present a "working-class" speaker against the Employee Free Choice Act, legislation that would make it easier for working people to organize unions.
Net worth: $20 billion
Before more or less buying the New York City mayor's office (so far, he's spent just under $150 million on his mayoral campaigns), Michael Bloomberg accrued his fortune by wiring the country's financial system through his software services company. Bloomberg LP's "Market Master" terminals helped make possible the complex computerized trading that became commonplace before the 2008 financial crash.
But the recession has been good to Bloomberg, too. Since 2007, he went from "only" 147th on the list of richest Americans to eighth place.
Bloomberg tries to present the image of a philanthroper and down-to-earth businessman, but his reign has proved to be a disaster for poor and working-class New Yorkers.
He has given millions of dollars to charities in New York City, but the sum is paltry compared to his overall net worth--and his contributions have also tied up city nonprofits with the political interests of the billionaire mayor. Bloomberg likes to tout the fact that he doesn't live in Gracie Mansion--the traditional home of New York City mayors--but aside from his apartment in Manhattan, he owns multiple homes in Britain and Bermuda.
As mayor, he's pushed through massive service cuts and layoffs in New York City (even before the onset of the current crisis), closing down day care centers, health clinics and worse. Now, claiming a $500 million budget shortfall--which he could easily cover himself and still be a multibillionaire--he plans more painful cuts.
In truth, Bloomberg isn't the mayor of the majority of New Yorkers. He's the mayor of moneyed Wall Street interests.
Christy Walton ($23.2 billion), Alice Walton ($23.2 billion), Sam Robson Walton ($23.3 billion), Jim Walton ($23.4 billion)
The Waltons earned their money the old-fashioned way--they inherited it. They struck it rich when papa Sam Walton, founder of the low-wage union-busting Wal-Mart chain, kicked the bucket.
Wal-Mart is the largest corporation in the world--so Sam Walton's heirs are some of the wealthiest people in the world. As labor author Nelson Lichtenstein described the company:
With sales approaching $300 billion a year, Wal-Mart has revenues larger than those of Switzerland. It operates more than 5,000 stores worldwide, more than 80 percent of them in the United States...It employs more than 1.5 million workers around the globe, making Wal-Mart the largest private employer in Mexico, Canada and the United States.
Wal-Mart became the behemoth it is today by driving down the wages of its own employees--and by using its weight in the market to pressure suppliers to drive down wages for their workers. Prior to Wal-Mart's rise, labor comprised about 30 percent of total costs for an average retail company. Wal-Mart drove down labor's share to 15 percent.
One important way Sam Walton did this was by fostering a corporate culture of messianic opposition to labor unions. Wal-Mart managers are under constant pressure to keep the union out. When unions do get a foothold--as they did recently in Quebec and Mexico, and 10 years ago with butchers at a Wal-Mart in Jacksonville, Texas--the company has closed down stores, or in the case of the butchers, simply abolished the department.
The impact on employees is obvious. Only a minority of "associates" is covered by the company health care plan, and Wal-Mart was publicly embarrassed by revelations that it encouraged workers to go on welfare to subsidize their meager wages and benefits.
In the 1950s--the era of the so-called "American Dream"--General Motors was the largest employer in the country. Strong unions helped GM workers win decent wages and good benefits.
The contrast with Wal-Mart couldn't be greater. As Lichtenstein observes:
During its heyday, factory managers at GM--hard-driving men in charge of 2,000 to 3,000 workers--took home about five times as much as an ordinary production employee. At Wal-Mart, district store managers--in charge of about the same number of workers--earn more than 10 times that of the average full-time hourly employee...
In 1950, GM President Charles E. Wilson...earned about 140 times more than an assembly line worker, while H. Lee Scott, the Wal-Mart CEO in 2003, took home at least 1,500 times that of one of his full-time hourly employees.
Of course, the Walton kids--who are flush with cash and still own more than a third of the company--live the good life. Some enjoy their vast wealth full time, while others have roles in the low-wage retail empire. Sam Walton has been chairman of the company--and daughter Alice is the family's political activist.
In 2004, Alice donated $2.6 million to the right-wing outfit Progress for America, which ran ads supporting the Iraq War and thanking George W. Bush for supposedly preventing another 9/11-style attack on American soil.
One of Alice's hobbies is horses. Another is reckless driving. In 1996, she was fined $925 for a DUI. In 1989, she struck and killed a 50-year-old woman in Arkansas. No charges were filed.
Net worth: $27 billion
It's the mid-1970s. There was just a wave of wildcat strikes across the country--and memories of the 1960s are still fresh in everyone's minds.
In San Francisco, Harvey Milk is leading protests for gay rights. Women have won abortion rights with the Roe v. Wade Supreme Court decision. The CIA recently aided in overthrowing the government of socialist Salvador Allende in Chile--and bringing to power the military dictator Gen. Augusto Pinochet.
What would you be doing if you were young back then? Protesting? Organizing a rank-and-file caucus in your union?
Not Larry Ellison. Ellison was networking CIA computer databases for the Ampex Corp.--under the codename "Oracle." In 1977, Ellison formed his own company, and he named it, of all things, Oracle. His first clients were Wright Patterson Air Force Base and the CIA.
Aside from doing IT work for coup-plotters and assassins, Ellison struck it rich by profiting off other people's ideas. The crucial innovation for networking computer databases was actually pioneered by scientists at IBM who couldn't figure out how to make money off their research. Ellison could--and he's been raking in the cash ever since.
But billions of dollars isn't always enough for Larry Ellison's extravagant lifestyle. According to leaked letters and documents from his lawyer, Ellison is regularly maxed out on his billion-dollar credit limit. This, seemingly, is due to his penchant for buying multiple homes and yachts--one yacht cost him $194 million.
Ellison spends upwards of $20 million a year on "miscellaneous lifestyle expenses," according to those documents. He lives on a sprawling estate modeled on a traditional Japanese village. For good measure, he also owns an actual villa in Japan (cost: $25 million).
Not only did Ellison do computer work for the CIA, and not only does he live like a latter-day Nero, but he also might be a "common criminal." In 2001, he was alleged to have dumped 29 million shares of Oracle stock on the basis of insider information--netting $900 million--just before the stock price fell.
Net worth: $50 billion
Warren Buffet has a reputation--especially after his support for Barack Obama in last year's presidential election--as a liberal billionaire. He's pledged to give 85 percent of his wealth to charity--after he dies, of course. He supports taxes on inheritance and lives in the same Nebraska home he bought in 1958.
But Buffet--born into relative wealth and privilege--isn't really very different from other billionaires.
He grew up the son of a stockbroker and U.S. congressman. By age 11, he was working at his father's brokerage house. By 14, he owned 40 acres of land that he rented out to tenement farmers.
In the 1960s, Buffet bought a textile company--Berkshire Hathaway--and turned it into a holding company, based on the "concept" of buying undervalued stocks and selling them when their values increased. In other words, he built his fortune on speculation.
The company--now Buffet Associates Ltd.--stopped producing textiles long ago, instead investing in insurance outfits like GEICO and AIG, corporations like Coca Cola, and media outlets/military contractors like the Washington Post, ABC and General Electric (which owns NBC).
Buffet's supposed "liberalism" has a lot of limits, both in business and politics. In 2003, he was an economic adviser to the budget-cutting candidate for governor of California, Arnold Schwarzenegger. Buffet once famously quipped, "I'll tell you why I like the cigarette business. It costs a penny to make. Sell it for a dollar. It's addictive. And there's fantastic brand loyalty."
His relatively Spartan lifestyle (for a billionaire, anyway) also has limits. In 1989, he bought a private jet for $10 million and christened it The Indefensible.
His attitude toward his wealth--for all his supposed philanthropy--is also indefensible:
I don't have a problem with guilt about money. The way I see it is that my money represents an enormous number of claim checks on society. It's like I have these little pieces of paper that I can turn into consumption. If I wanted to, I could hire 10,000 people to do nothing but paint my picture everyday for the rest of my life.
Net worth: $52 billion
Bill Gates III is regularly held up as an example of a rich person who actually earned his wealth--the Horatio Alger of computer software. The co-founder of Microsoft, we're told, made his way up from college dropout to running one the most successful corporations in history through hard work and intelligence. And he then retired to a life of magnanimous and progressive philanthropy.
The only problem with this story is that it's just that--a story.
The modesty of Gates' upbringing is greatly exaggerated. His father was a successful attorney, and his grandfather was the president of a national bank.
While Gates did drop out of Harvard to found Microsoft (thanks to a loan from his family), it wasn't his skills for software development that made him rich, but his "genius" in taking other people's ideas and marketing them. Since effectively cornering the market for PC operating systems, Microsoft's primary goal has been to maintain its predominant position and drive potential competitors out of business.
The mythmaking continues when it comes to Gates' philanthropy. The Bill and Melinda Gates Foundation is widely cited as a symbol of Gates' sense of social responsibility, funding projects to provide health care and AIDS treatment in places like Africa. But a Los Angeles Times investigation in 2007 showed the darker side of the fund.
"[A]t least $8.7 billion, or 41 percent of its assets, not including U.S. and foreign government securities...have been in companies that countered the foundation's charitable goals or socially concerned philosophy," the Times reported.
For example, the foundation has stock from corporations "ranked among the worst U.S. and Canadian polluters, including ConocoPhillips, Dow Chemical Co. and Tyco International Ltd," wrote the Times. The Gates fund invests in "many of the world's other major polluters, including companies that own an oil refinery and one that owns a paper mill, which a study shows sicken children [in a Nigerian town] while the foundation tries to save their parents from AIDS." Then there's the "pharmaceutical companies that price drugs beyond the reach of AIDS patients the foundation is trying to treat," the Times reported.
Like most rich philanthropists, Gates gives with one hand--and takes far more with the other.
EVEN BEFORE the economic crisis began, inequality had already risen to levels not seen in the U.S. since the eve of the 1930s Great Depression. In the 2000s, family income declined for the first time in decades, while those at the very top became richer and richer.
Ultimately, this wealth came from squeezing it out of the vast majority of people in the U.S. and around the world. The rich became richer by making workers work harder for less.
Now that we're in a severe recession, hourly wages are declining, unemployment is skyrocketing and, without a social safety net, workers are cutting back--not on luxuries like Warren Buffet's private jet, or Larry Ellison's personal armada, but on necessities like food, housing, education and health care.
What should make us most angry is that it doesn't have to be this way. The immense wealth of society doesn't have to be wasted on these parasites. It could be democratically controlled by the working-class people who produced it in the first place, and used to meet human needs.
The good news is that people's attitudes are changing. In early April, for example, a CBS News/New York Times poll showed that 74 percent of Americans favor increasing taxes on the rich. (Revolutionary socialists, of course, favor taxing the rich out of existence).
In the months and years to come, more and more people may be ready to head down to the town square after all--and protest a society of obscene inequality.