AMERICA’S BILLIONAIRES: Aristocracies that are sure to be with us for a very long time.

 

Might as well get to know them all now… they’re America’s Billionaires that have OVER $5 billion each. Oh sure, there are quite a few that have between $1 billion and $5 billion, but these days they’re just baby-billionaires.  These are people who individually in some cases, have more money than all of them combined could possibly spend in any one lifetime.

Some have fortunes that would buy entire countries. Some have incomes so high that you can’t ever tell exactly what they’re worth, because by the time you’ve got it all counted, it’s already grown significantly. Some made their fortunes out of nothing, however, most had more than just something to start with, and many made their money the old fashioned way… they inherited it.

What does someone do with billions upon billions of dollars? What drives someone to even want with such amounts of money? Don’t people with that kind of money feel guilty and want to give much of it away? Or, do they become consumed with protecting the family dynasty for centuries to come?

What does it do to someone’s life to leave them billions? How many homes can one possibly want to have? What about traveling? Do people know you? Do you need special security around your entire family? What about friends? Do you still have the same ones you had before you were a billionaire? Or do you even have friends anymore?

A hundred years ago, was the last time this country flirted with aristocracies. It was the Gilded Age and they were the Robber Barons, and it might have ended differently than it did, but in that case, the mega-wealthy in this country gave their fortunes away to large degree. Carnegie, Rockefeller, Vanderbilt… only JP Morgan held onto his countless millions, the rest felt they simply could not.

This time around, however, it’s far from clear as to how our wealthiest billionaires will leave this world. Will they create multiple aristocracies as has already begun to happen with will’s like Sam Walton’s, among others. Ever since Wal-Mart’s founder passed on, four of the top ten richest have shared his lineage and his name, with Christy at $37.2 billion… Jim at $35.9 billion… Alice at $34.5 billion… and S. Robson also at $34.5 billion.

Sam Walton’s estate was valued at right around $150 billion, an inconceivable amount of money for a single person to control, and the reason why is found in what Sam did with his fortune… he left it to his heirs in great big giant chunks.

Christy Walton married into the Walton clan, but since husband John died in an airplane crash in 2005, she is now the wealthiest woman is the entire world, the next richest being her sister-in-law Alice Walton, who trails her by a paltry $3 billion as of mid-September 2014.

Christy is out in front of the other Waltons financially as a result of a side investment by husband John into a solar energy company, First Solar. Christy’s 27% is worth some $1.8 billion. She will also receive $470 million in Wal-Mart dividends after taxes in 2014, and I can’t help but wonder… when you have $37.2 billion already, are you even happy about getting $470 millions in after tax dividends?

She is said to leads a very private life in Jackson, Wyoming.

Jim Walton, Sam’s youngest son still sits on Wal-Mart’s Board of Directors and is the largest individual shareholder in the company, with shares valued at more than $31 billion. He’s also chairman and CEO of the Walton family-founded Arvest Bank… worth about $1.8 billion, assets of nearly $15 billion, net profits of nearly $130 million in 2013, and branches in Arkansas, Kansas, Oklahoma and Missouri.

Alice Walton has used her just under $35 billion to focus on curating art.

In 2011, she was behind the opening of the Crystal Bridges Art Museum in her hometown of Bentonville, Arkansas.   And this year, according to Forbes Magazine, she agreed to purchase a home designed by Frank Lloyd Wright and have it moved down to the museum’s campus from New Jersey.  In her museum’s collection are paintings by Andy Warhol, Norman Rockwell and Georgia O’Keeffe, and she donated hundreds of millions of dollars’ worth of paintings from her personal collection.

She long favored the Republican party, but more recently donated $25,000 to support a presidential bid by Hillary Clinton.

Sam’s eldest son’s name is S. Robson Walton, known as the family face at the company since he’s been on the board for nearly half a century. In 2012, according to Forbes Magazine, he wrecked his Shelby Daytona Cobra Coupe — one of only five ever made, worth at least $15 million. Wrecked it… cool.

Wal-Mart has earned its fair share of bad press of late between criticism over low wages and an ongoing bribery scandal in Mexico.  Forbes says S. Robson is probably most concerned, however, about Wal-Mart’s growth. Revenue in 2013 grew by a measly 1.5%. Although, not to worry, Walton’s “investment vehicle” is said to own a stake in Hyatt Hotels valued at more than $600 million, so this family just keeps coming up covered in roses, doesn’t it now?

Of course, there are others on the top ten list of U.S. billionaires with a lot more than $35 billion to their names. Everyone knows Gates is worth around $80 billion, while Buffett clocks in at just under $70 billion. But there’s also Larry Ellison of Oracle fame, fortune and glory… at a little over $50 billion. Each one of the Koch Brothers is worth north of $40 billion.

Michael Bloomberg is worth $35 billion. There’s Zuckerberg and Page, Brin and Bezos at $31 – $34 billion each. Adelson, Icahn, Soros and then we hit three Mars Billionaires at $24 billion give or take, each… another family dynasty.

What will happen when this group of 94 U.S. mega-billionaires leaves this world?

In the top 20, we already have two families that have become aristocracies, multiplying as the heirs inherited quarters and thirds of multi-billion dollar fortunes. If one out of the current 10 billionaires follows suit, then we’ll soon have turned the 94 into something close to 200 individual aristocracies, each with an inordinate amount of money and if desired, resulting political influence.

The people in charge of these aristocracies of tomorrow won’t have anything in common with their predecessors. They will have grown up in some of the richest families on the planet. How will they use their wealth and influence? Will they ALL use it for good… history would tell us it would be unlikely.

And when the next generation turns the page, what of our 200 aristocracies then? Why they could turn into 400 and no one would say a word, and nothing would be done to prevent it. But would it be good for this country? Good to have 400…500…600…1,000 aristocracies each worth multi-billions of dollars, each led by someone who has never known life without a private helicopter?

And that’s just those with over $5 billion.

This situation is not one that was foreseen by the Founding Fathers of this country, but one has to think that those men envisioned a nation closer to the antithesis of a country with aristocracies, right? England has its Lords and Ladies… not us.

And yet, we’re creating them… or allowing their creation… by the hundreds, in fact, over the next hundred years.

This does not seem like a good thing.

You don’t have to try too hard to imagine that people with billions of dollars in any country can have an incredible amount of political influence, at local, state and/or federal levels… all three… all at once. They are the people that can write large checks at black tie affairs, the ones whose calls get returned the day after Election Day.

When they don’t like something, that makes whatever that thing is, have a much harder time doing whatever it was trying to do. Historically, it’s easy to recall, that kind of wealth has too often caused a multitude of problems for societies. And once aristocracies are in place, it’s almost impossible to get rid of them… they’ll be with us for good… having permanently altered our nation’s course.

Imagine this being a country with 1,000 mega-billionaire families. That’s enough to be hundreds of them in a given state. A couple hundred billionaires in any given state? Does that sound like it’s a good idea for a democracy? To anyone? Even to the future billionaires?

To me, it sounds like horribilem futurum, as they’d say in Rome… several thousand years ago.

 

Can Anything be Done About This?

We don’t have to allow the proliferation of billionaire aristocracies in this country… we can change tax laws that will make it less possible to amass untold billions that will then be within the control of any one family for hundreds of years.

Progressive taxation is one way to mitigate the societal ills associated with higher income inequality, as the tax structure directly reduces such inequality by taxing those with more… more. Or, we could change the inheritance tax to make sure less wealth can be transferred to subsequent generations.

The 2012 United Nations Conference on Trade and Development’s Trade & Development Report, showed that policies that, “redistribute income through progressive taxation and public spending would improve equality as well as economic efficiency and growth,” shouldn’t we be talking about this? The same report also made clear that…

“Greater inequality does not make economies more resilient to shocks that cause rising unemployment. On the contrary, it has made economies more vulnerable.”

 

It’s All Un-American

Many will say this entire line of thought is a violation of our basic freedoms… that the person who legally accumulates the wealth has a right to control it and therefore to give it to whomever they please prior to their death in the form of a will.

But, there are no absolute freedoms. I am not free to drive my car on the wrong side of the street because it would endanger other people’s lives… I can’t yell “FIRE!” in a crowded theater (unless it’s on fire, I suppose) because that too could endanger the lives of other citizens. I can’t walk around with a grenade in my pocket, for what should also be obvious reasons.

Using the same sort of thinking, I think you can easily argue that a small minority should not be free to hoard wealth in such a way as to prevent many others from enjoying their own lives. I also think that it’s a matter of our planet Earth offering us limited resources, and since wealth gives someone an inordinate amount of control over these finite resources, there needs to be some sort of limits on how much wealth an a family can hoard for themselves.

As was said during a debate on the same topic held by TED in 2013…

“Those who wish to pursue amassing of wealth can do so with the blessing of the society. They can enjoy that wealth to the fullest until they die. Then it returns to the society that created it. It gets put back in circulation to be used by all of the members of the society instead of just the elite few.”

 

Oh, don’t worry… we’ll still have plenty of rich people, even more perhaps. But we won’t have a growing population of hopelessly out-of-touch mega-billionaire aristocrats jaunting about the countryside in their Bugattis and Aston Martins, living behind tall iron gates where packs of barking Dobermans roam the countryside estate that’s nestled, at 30,000 square feet, in the pine trees about five miles up the private road.

The groundskeeper drives a Range Rover, the butler’s pad is at least 1,000 feet bigger than my house and with its gourmet kitchen and private lap pool… it’s a lot nicer than my house. The main house has a ballroom, of course, that will easily accommodate an affair of 600 guests. There’s underground parking for 72 cars. You feel like you could live in the master suite for the rest of your life and never want to be anywhere else.

There’s a tennis court and a helipad, a bowling alley and indoor and outdoor swimming pools… and stables down towards the dock where classic Boston Whalers are waiting for you to take a spin around the lake. For golfers… add a golf course. For skiers… add a mountain. If I’m a fly caster… then better throw in a river to run through it.

Got the picture? Why would someone have a right to leave tens of billions of dollars to their chip off the old blockhead?

And yet, on our current path, this is our future as a mathematical certainty, to have thousands of billionaires ruling, as a practical matter, all that they survey. People that never earned the money they control. Unless we were thinking about having them all neutered so they can’t multiply… this is exactly where we are headed.

But, why should anyone be allowed to leave tens of billions to a few heirs?

That money wasn’t made by that billionaire… that money was made courtesy of our public markets our securities laws, our public education system, our culture… along with the global economy, of course, which is another thing the billionaire had nothing to do with, by the way.

Nobody sets out to become a billionaire, much less a mega-billionaire. It’s not their genius or other flavor of brilliance that makes you someone who can buy countries, start you own space program, and live on a private island with a rail road built for no one but you. That kind of wealth wasn’t part of someone’s plan, it happened as a result of the U.S. economy, its capital markets, its equity markets, its ability to facilitate debt.

Its labor laws, its public education system, its institutions of higher learning… its business friendly tax code and regulatory climate… all of these things and more are why someone can raise untold billions to build a company that may never be worth what shareholders are paying for it. We’re even forgiving of failure in this country… ready to give you a helping hand through bankruptcy to restructure things so you can start all over again.

So, you can make as much money as you can in this country. That’s a wonderful thing.

But how about this… when you die, there’s a fixed amount that you can leave to your heirs, and the rest goes back into the society from which it came in the first place… back into the economy that allowed and even supported your making as much money as you possibly can, but when you go… you can only leave junior a set amount … I don’t know… what sounds fair?

How about $100 million… is $100 million enough for Little Lord Fauntleroy? And if not, how’s $200 million? Would that do it?

The other $20, $50, or whatever billion we’re talking about… well, it goes back to the U.S. Treasury to be spent keeping America the place where you actually can make billions of dollars, but junior is not going to get $34 billion when you kick the bucket, okay?

We know junior is a special child… in fact, I’m certain of it. But, he’s not going inherit enough money to buy two Canadian provinces, and an aircraft carrier.

When you die, you have to give most of the money back from where you got it… from the public markets… from the public, that’s where you got your $30 billion, not because everything you touch turns to gold, although that must get confusing for many billionaires at times.

They may have been responsible for making their first $50 million or so, but after that, it wasn’t just the billionaire, babe. The billionaire had some help, becoming a billionaire… and not all of that help was on the payroll. This country made your riches possible, but you can’t take it with you… or pass it off to the grown son who poses with you in the oil paintings.

Cannot take it with you, also means can’t pass it off to someone just like you. You can give them $100 – $200 million though. And why does that make you so sad? It’s really not that bad. With $100 million, it’s possible that junior will be his own billionaire some day. Why are you crying even louder? No, he’s not a total idiot, he could grow into something. Now, now…

And look… I’m not going to be difficult about amounts. If a $200 million inheritance limit, or the equivalent, was really going to cause some emotional damage, I’d be okay with doubling it again… heck triple it if that’s the only way we can start having some sensible conversations about where things are most certainly headed in this country today if something doesn’t change in this regard.

Sam Walton started Wal-Mart and built it up to 11,000 stores and annual sales over half a trillion dollars. When he died he was worth $150 billion. What will Google’s Page and Brin be worth when they’re… 40… I’m kidding… how about when they’re 80? I don’t know, nor do I care. They’re already worth over $30 billion each and that’s already too much for any normal person to have or want.

As an example, Zuckerberg from Facebook fame, recently bought something over-the-top-obnoxious… I think it was like 700 acres of the North Shore of Kauai. I’m not kidding, I could go there and find myself gazing out at Zuckerberg Bay.

I know this is a country where you’re supposed to be able to build a better mousetrap and await the world beating a path to your door. I know that it’s the land of opportunity… a capitalist society where we cheer the success of others because we know it could be ours one day too… a country where we embrace those that make it to the top.

But, we’re becoming way too TOP HEAVY way too fast in this country, and we should all care about that because we were not conceived to be a nation dominated by aristocracies, although that’s exactly where we’re headed today.

There’s still time to make changes so that America remains a country of the people, by the people and for the people… and not one where the wants of the few take precedence over the needs of the many.

Honestly, I don’t know what the answer is. But, in the words of the Bard… I also don’t think it’s much ado about nothing, 

 

Mandelman out.

 

AMERICA’S TOP 97 MEGA-BILLIONAIRES

($5 billion and up.)

 

1. Bill Gates is said to be worth $79.7 billion.

2. Warren Buffett comes in right behind Gates at $67.3 billion.

3. Larry Ellison, who founded Oracle, is listed at $47.4 billion.

4. Each Koch Brother is valued at $41.6 billion. Owners of 2nd largest private company in U.S.

5. Christy Walton & Family is worth $38.1 billion.

6. Jim Walton is worth $36.3 billion.

7. Michael Bloomberg is worth $35.1 billion. Has an 88% stake in Bloomberg and is back to work after serving as New York City’s mayor. In 2013, charitable giving of $450 million, as he targeted anti-gun programs in the US, and efforts to reduce overfishing in Brazil, Chile, and the Philippines.

8. Alice Walton is coming in at $34.9 billion.

9. Robson Walton has $34.9 billion.

10. Mark Zuckerberg is said to be worth $34.1 billion. I’ll LIKE if he’ll SHARE?

11. Sheldon Adelson has a cool $31.8 billion. He spent $1.5 billion building The Venetian and $100 million trying to put a Republican in the White House in 2012. Annual pay: $450 million.

12. Larry Page at Google has $31.5 billion.

13. And his partner Sergey Brin has $31.2 billion.

14. Jeff Bezos is worth $30.6 billion. Books online, huh.

15. Carl Icahn comes in at $26.2 billion.

16. George Soros has an even $24 billion.

17. John Mars has $23.6 billion.

18. And Forrest Mars Jr. has got $22.5 billion. Grandfather founded company in 1911. Snickers, Milky Way & M&Ms. Forrest is interested in historical preservation… see what I mean?

19. Jacqueline Mars $22.5 billion. A trustee of the U.S. Equestrian Team, and on the board of the National Sporting Library & Fine Art Museum. December 2013: She pleads guilty to misdemeanor – reckless driving after she crashes car, leaving an 86-year-old woman dead.

20. Steven Ballmer has got $22.4 billion.

21. Len Blavatnik has $21.5 billion. Ukrainian-American, who sold his stake in Russian oil firm TNK-BP for $7 billion in 2013, and has netted a personal profit of nearly $8 billion betting on chemical maker Lyondell Basell. Bought Warner Music for $3.3 billion in 2011. He donated $117 million to Oxford University to build the Blavatnik School of Government, and he’s an art collector who recently paid $14 million for “Woolly Mammoth” by Damien Hirst.

22. Phil Knight has got $19.8 billion. He just did it.

23. Michael Dell is worth $18.7 billion. Dude, he’s getting a Dell?

24. Harold Hamm is worth $18.7 billion. The most successful fracker… his company Continental Resources produces 168,000 barrels per day. Grew up poor, but divorce may cost him $3 billion. (Ooops, there goes another one… pop goes the aristocracy.)

25. Charles Ergen has $17.2 billion. Built DISH Networks and EchoStar into multibillion-dollar businesses from scratch. He’s an avid mountain climber who has climbed Mount Everest.

26. Laurene Powell Jobs somehow ended up with $16.6 billion. The Laurene Powell Jobs Trust is the largest individual shareholder in Disney, holding more than 130 million shares, a stake left to her by her late husband, Steve Jobs.  She’s a philanthropist, advocate and investor. She is among the top donors to Ready for Hillary, the Super PAC that has already raised some $6 million to support a Clinton presidential run.

27. Paul Allen still has $16.3 billion. Paul’s a high school buddy of Bill Gates – some private Seattle prep school – Allen dropped out of Washington State to work at Honeywell in Boston. He left to cofound Microsoft with Gates in 1975. Good move.

28. Anne Cox Chambers at 94 has $16.2 billion. She’s the surviving daughter of Cox Enterprises founder James M. Cox (d. 1957), Anne Cox Chambers is majority owner of a privately held media empire clocking $16 billion in annual revenues.

29. Donald Bren is worth $15.7 billion. He’s the nation’s richest real estate baron. His Irvine Co. owns 500 office properties, 40 shopping centers, 50,000 apartments, three hotels, several golf clubs, and marinas, and partridges in pear trees.

30. Ray Dalio is worth $15.2 billion. His Bridgewater Associates, is the world’s biggest hedge fund, now managing some $160 billion.

31. Ronald Perelman has got $14.3 billion. He finished school at NYU and got a job at Boston Consulting before heading to Wall Street. He made his first billions shorting the housing market in 2008 -09. The son of an Ecuadorian immigrant, he’s now bullish on Puerto Rico, which he’s called the Singapore of the Caribbean.

32. Rupert Murdoch and family have $14.2 billion. Fox News. “˜Nuf said?

33. John Paulson has $13.7 billion. He’s a leveraged buy-out legend whose made his money investing, but he’s also given away $50 million to New York Hospital and $25 million to the University of Pennsylvania. And watch out, because he’s for 8 kids.

34. Jack Taylor has $13.2 billion from Enterprise Rent-a-Car. Enterprise Holdings operates the Enterprise Rent-A-Car, Alamo and National brands. The company now has the largest fleet in the world with 1.4 million vehicles at 8,100 locations worldwide.  Taylor’s daughter Jo Ann Taylor Kindle is president of the Enterprise Holdings Foundation, the company’s charitable arm.

35. Abigail Johnson leads Fidelity and she’s worth $13.2 billion at 52. Abigail ascension to the top of Fidelity makes her the third generation of Johnsons leading Fidelity, the nation’s second-largest mutual fund company.

36. James Simons has hedged his way to having $12.5 billion.

37. Patrick Soon-Shiong has $12.1 billion. He’s the richest doctor who ever lived and he’s making progress on a huge project: connecting all the data about patient in hospitals, combining it with genetic information on a level nobody else is even imagining.  He’s also a member of the Buffett-Gates Giving Pledge, and plans to give away at least half his fortune. Meanwhile, he owns a 4%-stake in the Lakers and a home with its own indoor basketball court.

38. Andrew Beal has $11,2 billion from buying distressed assets since 2009. When the financial sector blew up in 2008, he started buying up beaten-down assets all over the country, including a Houston refinery, a mortgage on an office building in Ohio and home loans from Alaska to Florida. He gets richer thanks to the rising value of banks and massive dividends he pays himself every quarter. In 2001 he sat down to play against the world’s top poker players at the Bellagio in Las Vegas in one of the highest-stakes poker games ever.

39. Phillip Anschutz has socked away $11.1 billion. The Denver tycoon has held on to such fun assets as The Staples Center, London’s 02, the Los Angeles Kings, a third of the Lakers? AEG also controls 125 sports and music venues worldwide and the second-biggest live music producer (after Live Nation), with artists like Ben Harper, Billy Joel, Celine Dion and Carrie Underwood.  He also owns 300,000 acres in Wyoming where he’d like to build a giant wind farm someday.

40. Richard Kinder has $10.7 billion. He’s CEO & Chairman of Kinder Morgan, the largest U.S. pipeline company, which he cofounded in 1997 after stepping down as president of Enron.

41. George Kaiser is worth $10.6 billion. This year he became the newest co-owner of the NBA’s Oklahoma City Thunder. Other team owners made fun of him for flying commercial instead of having his own jet. In the 1930s Kaiser’s family fled Nazi Germany and came to the U.S. His uncle founded Kaiser-Francis Oil Company. George inherited control in the late 1960s.

Sorry, but if you want to look up the rest, you’re on your own…

42. Steven Schwarzman of Blackstone has $10.6 billion.

43. Steven Cohen another hedgie has $10.3 billion.

44. Elon Musk of Tesla fame now has $10.2 billion.

45. Davis Tepper hedged his way to $10 billion.

46. Charles Butt & Family comes in at $9.9 billion.

47. Samuel Newhouse Jr. is 86 with $9.5 billion.

48. Elaine Marshall & Family is 72 and has $9.2 billion.

49. Thomas Peterffy, at 69, has $9.1 billion.

50. Eric Schmidt of Google has $9.1 billion.

51. Donald Newhouse, 84, has $8.7 billion.

52. John Menard at 74, has $8.6 billion.

53. Blair Parry-Okeden at 63 has $8.3 billion… two rich kids coming.

54. Jim Kennedy has $8.3 billion and is 66.

55. Pierre Omidyar of eBay has $8.2 billion at 47.

56. Leonard Lauder is 81 and has $8.2 billion.

57. Hank and Doug Maijer have $8.2 billion.

58. Dustin Moskovitz is 30 and is worth $8.1 billion from FB.

59. Thomas Frist Jr. and Family have $7.6 billion… and 3 rich kids in our future.

60. Jan Koum has $7.6 billion from WhatsApp and is 38.

61. Ralph Lauren has $7.6 billion and is 74.

62. David Duffield has $7.4 billion at 73.

63. James Goodnight is worth $7.3 billion at 71.

64. Edward Johnson III has $7.3 billion from father-founded Fidelity.

65. Randa Williams is worth $7 billion at 53. (Eldest daughter of 4 billionaire siblings.)

66. Dannine Avara is worth $7 billion at 50.

67. Milane Frantz has $7 billion at 45.

68. Scott Duncan has $7 billion at 35.

69. Gordon Moore has $7 billion at 85 from Intel.

70. Eli Broad has $6.9 billion at 81.

71. Charles Johnson has $6.7 billion at 81.

72. David Geffen at 71 has $6.7 billion.

73. Rupert Johnson Jr. has $6.5 billion at 73.

74. Charles Schwab has $6.4 billion at 77.

75. Micky Arison has $6.4 billion at 65.

76. Sumner Redstone has $6.4 billion at 91.

77. Ray Lee Hunt has $6.3 billion at 71.

78. Jeffrey Hildebrand has $6.2 billion at 55.

79. John Malone at 73 has $6.2 billion.

80. Gayle Cook has $6.2 billion at 80.

81. Kelcy Warren has $6.1 billion at 58.

82. Leslie Wexner at 77 has $6.1 billion. Victoria’s Secret, Pink, Bath & Body Works, etc.

83. Robert Rowling at 60 has $6.1 billion.

84. Ira Rennert has $6 billion at 80.

85. Richard DeVos has $6 billion at 88 from Amway.

86. Dennis Washington has $6 billion at 80.

87. Stanley Kroenke has $5.9 billion at 67. Husband of Wal-Mart heiress.

88. Richard LeFrak and family has $5.7 billion at 69.

89. Stephen Rose has $5.6 billion at 74.

90. Herbert Kohler Jr. and family has $5.6 billion at 75.

91. Ken Griffen, Citidel Hedge funds has $5.5 billion at 45.

92. Jin Sook and Do Won Chang have $5.4 billion from Forever 21 chain.

93. Trevor Rees-Jones has $5.4 billion at 63.

94. Leon Black has $5.2 billion at 63.

95. David Green has $5.1 billion at 72.

96. George Roberts has $5.1 billion at 70 from KKR.

97. Henry Kravis has $5 billion at 70.