Chronicles of Inequality (TOO MUCH, December 15, 2014)
About Too Much, a project of the Institute for Policy Studies Program on Inequality and the Common Good Join us on Facebook Enjoy Too Much? Email this issue to a friend who America’s Ten Greediest: The 2014 Edition This year’s all-stars of avarice range in age from thirty-somethings to just shy of octogenarian status. They’re all doing their greedy best to keep our world a staggeringly unequal place. How has the United States become so unequal? We need to look for answers, first and foremost, in our society’s underlying economic and political realities, at the policies and practices that let wealth concentrate — at the top — so intensely. But we also ought to look at people, the real-life flesh-and-blood characters who make decisions that privilege the few over the many. These greedy souls love the shadows. Let’s shine some light — on this year’s greediest of them all. May the greed we spotlight here help inspire the rest of us to do as much as we can, in 2015, to make our world a much more equal place. 10/ Paige Laurie Dubbert: Walmart Wealth The rather obvious irony here: Few firms over the years have feasted more off wage theft than Walmart. This past spring, the company agreed to a $21-million settlement in a wage theft lawsuit in California. Labor attorney Theresa Traber handled the case. Retail giants like Walmart, she says, “use middlemen to hire workers in their warehouses to evade wage and hour laws.” In 2012, cheated U.S. workers overall took in $280 million in backpay for wage-theft violations, almost twice what robbers grabbed for the year from banks, gas stations, and convenience stores. Paige Laurie can look forward to inheriting far more than $280 million someday. Her mom and aunt are currently sitting on $6 billion worth of Walmart shares. 9/ Ken Langone: Zip It, Pope Langone himself has always been a generous sort. As a New York Stock Exchange director, he greased the skids for a $190-million exit package for his buddy, NYSE president Richard Grasso, in 2003. Langone has been a bit less generous to the powerless. As a director at Yum! Brands, the home of Taco Bell and KFC, he cheered on company efforts to oppose hikes in the minimum wage. Langone has always enjoyed railing against government regulations like our wage minimum. As he likes to put it: “Leave us alone and let us hire people.” Home Depot, the retail giant Langone’s financing helped propel to big-box dominance, shows what happens when you leave corporations alone. Big-box giants, notes the research group Good Jobs First, don’t create jobs. They “grow mostly at the expense of existing competitors,” many of them local businesses. Big-box giants, on the other hand, do create massive concentrations of personal wealth. Forbes now estimates Langone’s net worth at $1.6 billion. 8/ Dennis Jones: Doing Good Comfortably How’s that? The millions spent on his yacht, Jones told an interviewer earlier this year, kept a shipyard in business. And the $170,000 he spends every month keeping his boat ship-shape, Jones adds, funds paychecks for a 10-person crew. Jones retired in 2000, after selling his pharmaceutical business for $3.4 billion, and now spends his terra firma time at a St. Louis mansion over 12 times the size of a typical new American home. Between the manse and his yacht, Jones says, he and his wife enjoy the “same level” of luxury “wherever we go.” Jones says he also does good outside yachting. His favorite charity? Maybe Junior Achievement, “because it teaches children about free enterprise.” 7/ Micky Arison: Miami’s Biggest Winner Workers and customers at Arison’s prime business, the Carnival cruise ship empire, might beg to differ. Maritime lawyer Jim Walker dubs Arison “hands down” the greediest executive in an exceptionally greedy industry. Cruise lines like Carnival, notes Walker, incorporate abroad to sidestep U.S. taxes, labor laws, and safety regs. They then “pay dirt cheap wages” to the workers from developing nations they have staffing their ships. Carnival of late has ratcheted up the squeeze on workers. Over the past two years, the cruise line has terminated retirement programs for Filipino workers, snatched tip income from staff hired in Mumbai, and fired 150 waiters who dared to protest. Such tactics have helped up Arison’s personal fortune over $6 billion. Earlier this year, the 65-year-old Arison started cashing out chunks of his Carnival shares at about the same time passengers left adrift last year on a faulty Carnival ship were testifying in a lawsuit against the company. That incident subjected over 4,200 passengers to five days of overflowing toilets and rotting food. Carnival is calling the subsequent passenger lawsuit “an opportunistic attempt to benefit financially” from “alleged emotional distress.” The Miami Herald recently asked Arison to share the secrets of his success. Repliedthe Bal Harbour billionaire: “There is no substitute for hard work.” Or the right genes either. Arison’s daddy Ted founded Carnival in 1972. 6/ Jay Dweck: High-Tech Happiness How does Dweck propose to do that improving? He’s pioneering new technology to make life sweeter — for the 1 percent. And the guinea pig for this new technology? Dweck himself! He’s now spending $3 million on new-tech renovations of his home and another $3 million on projects that involve his household amenities. Dweck’s master bathroom will soon feature a TV by his whirlpool tub, another facing his toilet and bidet, a shower nook for a third TV, and a fourth screen across from his bathroom sink. All the TVs will turn on automatically whenever someone steps near them. Dweck’s estate also features a violin-shaped pool that sports 440,000 hand-laid individual glass tiles and 5,600 fiber-optic cables. The tiles light up like multicolored Stradivarius strings, in time with Dweck’s favorite music. Live Better Systems, a company Dweck set up this past May, will be marketingsimilar high-tech marvels to his fellow awesomely affluent, once all the kinks get worked out. 5/ Phil Knight: Just Do It, Ducks! Knight spent a reported $68 million on a three-building “Performance Center” for Oregon football, a plush temple to touchdowns that boasts 64 55-inch TVs in the main lobby and a weight room floor crafted from Brazilian hardwood. In gratitude, the university’s football brass have set aside a locker in the facility’s space-age locker room for “Uncle Phil.” Each locker comes with plenty of room and its own ventilation system. But Knight has storage needs that even the largest locker can’t possibly handle. That’s why he’s paying $7.6 million to construct a hangar for his personal $64.5-million Gulfstream private jet. With a $22.4 billion fortune, Knight can afford to buy — and store — anything he could possibly covet. But his Nike corporate empire still can’t seem to afford to provide workplace decency for the company’s huge outsourced workforce. Back in the 1990s Nike tried denying this workforce’s subminimum wages and horrible working conditions. Then the company reversed field and vowed to become a model employer. But that highly touted turnaround, political scientist Richard Locke concluded last year, remains a “disappointment.” Nike and Knight are still profiting mightily off factories suffering “from persistent problems with wages, work hours, and employee health and safety.” 4/ James Mitchell: The Torture Doc “I’m just a guy who got asked to do something for his country by people at the highest level of government,” an unrepentant Mitchell has been telling reporters, “and I did the best that I could.” That service to his country appears to have been something less than selfless. Mitchell, New York magazine notes, saw early on that the post-9/11 world would provide “business opportunities” for someone with his Air Force background in prepping pilots for the brutal interrogations they might face if captured. Mitchell promptly corralled “his old friend Jessen,” and the pair convinced CIA officials they could get al-Qaeda detainees to talk. Mitchell and Jensen, the Senate torture report reveals, had no experience conducting interrogations or any specialized knowledge about counterterrorism. But they had a great sales pitch — and soon found themselves orchestrating torturesthat ranged from waterboarding to standing detainees on broken limbs. The tortures would make Mitchell a small fortune. His initial hourly consulting fee ran four times the CIA going rate for interrogations. Between 2005 and 2009, after the CIA outsourced the bulk of its interrogation work directly to a consulting company that Mitchell and Jessen had set up, the pair collected $81 million. The CIA, Reuters notes, has so far shelled out another $1 million to protect Mitchell and Jessen from any legal liability for their barbarous work. Mitchell, now living a sunny life in Florida, last week called the Senate report “a load of hooey.” 3/ Paul Singer: Wall Street’s Top Vulture One result: Instead of building schools, the Congo ended up paying Singer $127 million for Congolese debt he acquired for $10 million. In Argentina, a government elected in 2003 convinced over 92 percent of the investors holding the old government’s defaulted bonds to accept partial payment. But Singer refused to go along. The Wall Street kingpin then set up a front group to lobby in Washington and found a federal court that eventually ruled in his favor. Earlier this year, the U.S. Supreme Court refused to hear Argentina’s appeal. Singer originally paid $49 million for Argentinian debt. He now stands to collect as much as $832 million. Argentina is still battling to stop Singer’s financial “extortion.” Early in December, Singer shot back against that resistance. Argentina, he charged, “has elevated a commercial dispute” into “a dispute about national dignity.” 2/ Travis Kalanick: Getting Uber Rich Quick That growth has Uber now worth $40 billion, more than the value of top transportation heavyweights like Hertz and United Continental. Not bad for a company, the AP notes, “that didn’t exist five years ago.” The 38-year-old Kalanick himself, Forbes estimates, is ending the year personally worth a cool $3 billion. How has Uber soared so quickly? The company is pumping up profits, critics charge, by taking short cuts like not running adequate safety background checks on drivers. Officials in L.A. and San Francisco have just filed suitagainst Uber on driver safety checks, and governments from Spain to India have also taken legal action against the company. Other critics include customers like Leah Kappen of Indianapolis. She took an Uber ride downtown to the December 6 Big Ten football championship game. That ride cost her $30. The 18-minute trip home after the game cost her $450. This past Halloween, an 18-mile-ride home ran New Yorker Elliott Asbury $539. Uber’s “surge pricing” — a policy that keys rates to the market demands of the moment — generated these outsized fees. The riders these fees upset, says Kalanick, need to start “getting used to dynamic pricing in transportation.” Uber drivers are complaining, too. One of Uber’s competitors, the Lyft service, gives the extra profit from “surge pricing” all to its drivers. Uber takes a 20 percent cut. Why not, the Wall Street Journal asked Kalanick, follow suit? “We are a business,” he replied. 1/ Larry Ellison: Owning Everything Ellison will definitely not top the CEO pay list next year. The reason: In September, Ellison stepped down as Oracle’s chief exec, a slot he has filled since he started the company over three dozen years ago. But Ellison hasn’t quite retired yet. He’s now serving as Oracle’s “chief technology officer.” Ellison also still holds about a quarter of Oracle’s shares, a stash that brings his net worth to $50.6 billion, enough to make him the world’s fifth-richest person. In residences owned, Ellison may well rank as the world’s numero uno. This past March, a business publication took a shot at cataloging the homes and other properties Ellison has collected over the years. He has, notes Business Insider, “all but taken over entire neighborhoods in Malibu and the Lake Tahoe area.” Ellison’s big-time collecting started back in 1988 when he picked up a $3.9-million home in San Francisco. He would later spend nine years recasting a 23-acre estate further down the San Francisco peninsula into a $70-million faux 16th-century Japanese emperor’s palace. Ellison owns a real-life Japanese palace, too, a historic $86-million garden villa in Kyoto. And don’t forget his $10.5-million mansion in Rhode Island’s Newport or his $42.9-million golf estate in California’s Rancho Mirage. Or the $500 million he shelled out two years ago to buy 98 percent of the Hawaiian island of Lanai. Like this article? Sign up Ellison, to be sure, has interests that go beyond real estate. He likes yachts. He currently has two, each over half as long as a football field. Ellison also likes to play basketball, even on his yachts. If a ball bounces over the railing, no problem. Ellison has a hired hand in a powerboat following his yacht, reports noted this past spring, “to retrieve balls that go overboard.” Wisdom on Wealth: Too Much has highlighted hundreds of perceptive pieces on economic inequality over the past 12 months. A sampling of our favorites . . . Jed Rakoff, The Financial Crisis: Why Have No High-Level Executives Been Prosecuted? New York Review of Books, January 9, 2014. Mark Bittman, Rethinking Our ‘Rights’ to Dangerous Behaviors, New York Times, February 25, 2014. James Surowiecki, The Mobility Myth, New Yorker, March 3, 2014. Colin Gordon, Our Inequality: An Introduction, Dissent, March 6, 2014. Robert Kuttner, The Inequality Puzzle, American Prospect, March 12, 2014. Robert Wilmers, Why Excessive CEO Pay Is Bad for the Economy, American Banker, March 14, 2014. Dana Goldstein, How Higher Ed Contributes to Inequality, Atlantic, April 9, 2014. Atif Mian and Amir Sufi, Family Structure and Inequality, House of Debt, April 10, 2014. Jack Metzgar, Education as Answer to Inequality?, Washington Spectator, March 18, 2014. Bob Lord, A Third of a Trillion for Three Families, Inequality.Org, March 20, 2014. Zoë Carpenter, Will Phony Populists Hijack the Fight Against Inequality? Nation, April 21, 2014. Damon Linker, Why we need a maximum wage, The Week, April 22, 2014. Martin Wolf, A more equal society will not hinder growth, Financial Times, April 22, 2014. Geoff Davies, More Effective Remedies for Inequality, Naked Capitalism, April 23, 2014. Joe Firestone, Are We An Oligarchy Yet? New Economic Perspectives, April 29, 2014. Jared Bernstein, Inequality and Pay: ‘Rents’ vs. Merit, Huffington Post, April 29, 2014. Timothy Noah, Sorry conservatives, America’s mobility problem is real, MSNBC, April 29, 2014. Breck MacGregor, Why inequality undermines societies: an evolutionary perspective, Contributoria, April 2014. Kathleen Geier, What Piketty’s Neoliberal Critics Get Wrong, Baffler, May 15, 2014. Paul Krugman, On Inequality Denial, New York Times, June 2, 2014. Rabbi Philip Graubart, Income Inequality, the Spiritual Dimension, San Diego Jewish Journal, June 2014. Donald Cohen, Privatization widens economic inequality and punishes communities, The Hill, June 6, 2014. Nancy Koehn, Great Men, great pay? Why CEO compensation is sky high, Washington Post, June 15, 2014. Gar Alperovitz, After Piketty, the ownership revolution, Aljazeera America, June 17, 2014. Joseph Stiglitz, The Myth of America’s Golden Age: What growing up in Gary, Indiana, taught me about inequality, Politico, July/August 2014. Faiza Shaheen, Mind the gap: why UN development goals must tackle economic inequality, Guardian, July 1, 2014. Benjamin Kunkel, Paupers and Richlings, London Review of Books, July 3, 2014. Toni Gilpin, ‘Them That’s Got Are Them That Gets’: Piketty’s Lessons for Activists, Labor Notes, July 3, 2014. Sarah Anderson, The State of Runaway CEO Pay Resistance, OtherWords, July 9, 2014. Simon Wren-Lewis, If minimum wages, why not maximum wages? Mainly Macro, July 28, 2014. Robert Prasch, What’s Wrong with ‘Congestion Pricing’? New Economic Perspectives, August 1, 2014. Harold Meyerson, Economic inequality, not just wages at the bottom, needs to be addressed, Washington Post, August 13, 2014. Lynn Stuart Parramore, The 1 percent’s devious new scheme: How CEOs are getting rich at your expense, Salon, August 23, 2014. H Jay Parini, What Jesus knew about income inequality, CBS 6, August 23, 2014. Richard Wilkinson and Kate Pickett, A Convenient Truth: A Better Society for Us and The Planet, Fabian Ideas, September 2014. Robert Weissman, Is There a Billionaire Cancellation Effect? Huffington Post, September 10, 2014. David Cay Johnston, How Corporate CEOs Get Rich off of Taxes, Newsweek, September 12, 2014. Lars Osberg, Is Education the Answer to Income Inequality? Inequality.Org, September 12, 2014. Susan Holmberg and Mark Schmitt, The Overpaid CEO, Democracy, Fall 2014. Marjorie Wood, The Scourge of Siphon-Up Economics, OtherWords, September 24, 2014. Roger Martin, The Rise (and Likely Fall) of the Talent Economy, Harvard Business Review, October 2014. Josh Hoxie, When Income Tax Cuts Masquerade As Estate Tax Repeal, Forbes, October 1, 2014. L. Randall Wray, Rising Tides Lift All Yachts: Why the 1% Grabs All the Gains from Growth, New Economic Perspectives,October 1, 2014. Dean Baker, World’s richest man tries to defend wealth inequality, Al Jazeera, October 16, 2014. Nick Tabor, Breaking Up Fortunes, Jacobin, October 16, 2014. Linda Beale, Both the rich and ordinary Americans misunderstand their economic interests, A Taxing Matter, October 23, 2014. Sean McElwee, The 1% are more likely to vote than the poor or the middle class, and it matters — a lot, Vox, October 24, 2014. John Bellamy Foster and Michael Yates, Piketty and the Crisis of Neoclassical Economics, Monthly Review, November 2013. Gara LaMarche, Democracy and the Donor Class, Democracy, Fall 2014. Michael Konczal, Frenzied Financialization, Washington Monthly, November-December 2014. Chuck Collins, Leave No Generation Behind, OtherWords, November 12, 2014. Robert Reich, The 1 percent is gutting America’s middle class, Salon, November 19, 2014. Pam Martens, Wiseguys: Drawing Parallels Between the Mafia and Wall Street, Wall Street on Parade, November 19, 2014. David Callahan, The Billionaires’ Park, Guardian, December 1, 2014. Paul Buchheit, Slap-in-the-Face Wealth Gap Images, Common Dreams, December 1, 2014. Scott Klinger, Corporate tax breaks come at the cost of the country’s future, Baltimore Sun, December 2, 2014. Give a gift of inspiration this holiday season, Too Mucheditor Sam Pizzigati’s gripping history of the triumph over America’s original plutocracy. Check the publisher discount! 2014’s Top Reasons for Egalitarian Cheer A few years down the road from now, we may see these three new challenges to concentrated wealth that emerged in 2014 as the triggers for a global distributional turnaround. Plutocrats didn’t have much reason to tremble in 2014. But they did have some. In fact, three developing stories over the course of the year may signal trouble ahead for the deepest-pocket set. The details . . . 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December 15, 2014
THIS WEEK
The greediest among us — those who grasp for ever more when they already have far more than enough — had another banner year in 2014. That somewhat complicates this last Too Much edition for the calendar year.We’re highlighting in this 2014 finale our annual list of the year’s “ten greediest.” But with so many greedy out there this year to choose from, getting down to just ten hasn’t been easy. But we’ve persevered and come up with a list of America’s greediest that offers an all-star array of 2014’s most avaricious.We have for you an heiress and a hedge fund billionaire, a psychologist and a banker, and, naturally, some denizens of Corporate America’s executive suites. All these — and some additional year-end reflections — in this week’s Too Much.We’ll be returning, right after the holiday break, with our first Too Much issue of the new year — and a new Too Much look as well. We think you’ll like it. In the meantime, all our best for the holiday season!
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INEQUALITY IMAGE OF THE YEAR
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IN FOCUS
Paige Laurie Dubbert, the granddaughter of Walmart founder Sam Walton’s brother and business partner, is charging wage theft. The gent she wedded six years ago, says a Dubbert divorce filing, schemed to pay himself and a friend $70,000 a month to run her retail center for Southern Cal’s super rich.
This 79-year-old venture capitalist began 2014 making headlines with his advice for Pope Francis. The pontiff, Ken Langone told New York’s archbishop, should cool it on the inequality front. Papal broadsides against “the powerful feeding upon the powerless,” Langone went on to pronounce, may leave America’s wealthy “incapable of feeling compassion for the poor.”
Some people do good volunteering in homeless shelters. St. Louis mega millionaire Dennis Jones says he does good sailing the seas on his brand-new $34 million yacht.
Pro basketball, the Miami Heat owner Micky Arison likes to say, only has one winner at the end of each year. But in business, he adds, “we can all be winners.”
Banker Jay Dweck has made enough on Wall Street, working for Goldman Sachs and Morgan Stanley, to afford to live in a $4.8 million home an hour’s drive north of Manhattan. But Dweck has dreams that go beyond scoring big in high finance. His current vision? Dweck wants “to improve quality of life using technology.”
The University of Oregon Ducks will be playing for the national football championship this January, and no Oregon fan will be quacking more fervently than class of ’59 alum Phil Knight. But the billionaire Nike chairman does a lot more than just cheer for his dear Ducks.
Last week’s release of the long-awaited U.S. Senate Intelligence Committee report on CIA torture tactics after 9/11 has made Dr. Jim Mitchell and his partner Dr. Bruce Jessen the world’s most notorious psychologists. The report details the pair’s role as the architects of the CIA “enhanced interrogation.”
Hedge fund billionaire Paul Singer has built his personal fortune practicing what the wags on Wall Street like to call “vulture investing.” He snaps up the bonds of economically distressed nations at “next to nothing,” then flexes his fortune to force those nations to pay him far more than what he paid.
What a year for the CEO and co-founder of Uber, a taxi-like service that lets travelers hail cars through a mobile phone app. Back last January, Uber was running cars in just 60 cities. The current total: 250 cities — in 50 countries!
Year in and year out, Larry Ellison pulls down more compensation than any other corporate CEO in the United States. He topped the list for 2013 with $78.4 million. He’ll likely top the list for 2014 as well. He grabbed $67.3 million for the year, his Oracle software company announced in September.
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The Year’s Best
ANTIDOTES TO INEQUALITY
Too Much readers have known all about French economist Thomas Piketty since the year-end Too Much issue back in 2006 hailed his innovative work. Piketty and his colleague Emmanuel Saez had begun annually updating “the dollars going to America’s most financially fortunate,” providing the first up-close look at the nation’s top 0.1 and 0.01 percents. In 2014, Piketty’s impact went global. His blockbuster Capital in the Twenty-First Century became a worldwide best-seller — and shoved the dangers of extreme wealth concentration right onto the international political center stage. Haven’t read the 696 pages of Piketty’s masterwork yet? You can check online all the book’s fascinating charts and graphs.
Outrageous rewards give CEOs a powerful incentive to behave outrageously. In two states this year, Rhode Island and California, lawmakers took imaginative steps to limit those outrageous rewards. Rhode Island lawmakers moved to give preferential treatment in government contracting to firms that pay their top execs no more than 32 times what they pay their workers. In California, lawmakers took up legislation that raises the corporate tax rate on companies with wide gaps between CEO and worker pay. The bills didn’t pass, but both won senate majorities. The drive to place consequences on CEO-worker pay ratios may soon be coming to Washington. In November the co-sponsor of the California bill, Mark DeSaulnier, won his bid for Congress.
Charities haven’t traditionally focused on grand masses of private wealth — and the rich and the powerful certainly like things that way. But one of the world’s most visible charities, the London-based Oxfam, is now moving to make sure that no policy makers ever again get away with dismissing the danger that concentrated wealth poses. Oxfam in October launched a global Even It Up campaign against income and wealth maldistribution. A mere 1.5 percent tax on individual wealth above $1 billion, Oxfam notes, would raise $74 billion yearly, “enough money to fill the annual gaps in funding needed to get every child into school and to deliver health services in the world’s poorest countries.” Oxfam, says executive director Winnie Byanyima, is standing “with people everywhere who are demanding a more equal world.”
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