Hiltzik: Our beleaguered billionaire whiners

Nothing says “billionaires” in America like demanding that their efforts to exert control over society be shrouded in secrecy.

Exhibit A, for now, is Elon Musk’s suspension of more than half a dozen journalists and commentators from Twitter, the social media platform he owns. Their offense is that they wrote about @ElonJet, a Twitter account that tracked the trajectories of their private jets, using public information.

The @ElonJet account was also banned. Some of the suspended journalists had written about the ElonJet ban.

Self-made billionaires are a myth. Just like unicorns.

Former Secretary of Labor Robert Reich

Musk suggested that reports from and about @ElonJet were equals “doxxing”, a practice in which someone’s home address and other personal information is exposed online without their permission, often opening targets to harassment or physical harm.

Other billionaires have been flexing their privacy muscles.

Hedge fund billionaire Ken Griffin sued the Internal Revenue Service on Tuesday over what he says was the “unlawful disclosure” of his tax and income records due to the “intentional and willful failure of the agency to establish appropriate administrative, technical and/or physical safeguards over its system of records”.

The information ended up in a series of ProPublica articles detailing the taxes of Griffin and other members of the 1%. ProPublica has not disclosed how it obtained the records.

Do billionaires really have anything to complain about? Hardly They and their fortunes are protected by a bodyguard of laws and regulations.

Their political donations can be kept confidential, thanks to the IRS’s lax enforcement of regulations that grant donor secrecy only to “social welfare” organizations, not those engaged in politics. As I wrote earlier this year, the IRS’s practice of handling millionaires and billionaires with kid gloves has been known and documented for years.

Where does the IRS focus its firepower? About the middle class and the poor: The agency audits households with less than $25,000 in income at five times the rate of anyone else.

When the Biden administration and Congress enacted an increase in IRS enforcement that would begin to correct the imbalance, Republicans on Capitol Hill reacted as if the very foundation of the republic was collapsing.

The whining that comes from the 1% isn’t particularly new, but it always comes with an element of absurdity.

In 2014, venture capitalist Thomas Perkins grotesquely (and ungrammatically) said, in a letter to the Wall Street Journal, about “fascist Nazi Germany’s parallels with its war against its “one for hundred”, i.e. their Jews, with the progressive war. . on the American one percent, i.e. the “rich”.

Leon Cooperman, a recidivist billionaire complainer, cursed the senator profanity. Elizabeth Warren (D-Mass.) When she proposed a tax on billionaires in 2019: “This is the [blankety-blank] She is the American Dream [blankety-blanking] ” he complained to Politico. (Want to see the quote in all its technicolor glory? Go here.)

Cooperman, who once paid nearly $5 million to settle insider trading charges brought by the Securities and Exchange Commission, resurfaced last year to again argue over an estate tax.

Venture capitalist Vinod Khosla has been fighting since 2008 to keep the public off the public beach in front of his property in San Mateo; keeps losing, including a failed appeal to the US Supreme Court.

Right now, a gate to Martins Beach, the stretch of sand and ocean in question, is open by order of the government, and a lawsuit filed by the state to secure the public’s rights once and for all is pending in state court.

(My colleague Steve Lopez has called Khosla “one of the most arrogant people in the history of the state,” which seems almost charitable given Khosla’s record.)

The complaints of billionaires can clearly backfire. Consider the so-called Streisand effect. This stemmed from a lawsuit the world-famous entertainer filed to remove an aerial photo of her Malibu estate from the Internet as an invasion of privacy. (The photo was part of a project to photograph the entire California coast.)

Instead of ensuring her privacy, Streisand’s lawsuit turned her into an Internet sensation. It remains easily accessible online.

As an example of the Streisand effect, the latest whine about the privacy of the rich reminds us of the truth of the observation, credited to an adviser to the rep. Alexandria Ocasio-Cortez, that “every billionaire is a political failure.”

This means that the extreme concentration of wealth seen in the US today is the result of economic incentives that encourage extreme inequality by failing to recognize the economic contributions of society as a whole. Of the top 20 members of the Forbes 400, that magazine’s annual list of the wealthiest Americans, at least eight gained their wealth through inheritance or marriage (more precisely, divorce).

Of all the rest, indeed all 400 non-inherited, not a single one amassed their fortune without the help of others, including what may be legions of employees, many of them on minimum wage. Some also built their companies by taking advantage of public investments: highways, airports, basic scientific research, etc., etc.

“Self-made billionaires are a myth,” former Labor Secretary Robert Reich wrote earlier this year. “Like unicorns.”

Reich points to the leg up that even the proverbial “rags to riches” billionaires received from family wealth and influence. Musk, for example, got at least part of his stake from an emerald mine his family owned during the apartheid era in South Africa.

Jeff Bezos didn’t start Amazon.com as an entrepreneur with no money, but with a quarter of a million dollar investment from his parents.

It’s not unusual for billionaires to build their fortunes on their own intellectual qualities, but they couldn’t get where they are on their own. This points to the question of how much wealth they deserve to have and get to their heirs.

The Founding Fathers had an answer: almost none. The founders had a visceral horror of inherited wealth. In his autobiography, Thomas Jefferson advocated “a system by which every fiber of the ancient [sic] or future aristocracy; and the foundations were laid for a truly republican government”. Its aim was “to prevent the accumulation and perpetuation of wealth in select families”.

Jefferson and his peers would be appalled at the concentration of wealth in America today. Presumably they will find good economic and social sense in taxing excessive income and excessive wealth.

Among the advantages that billionaires receive because of their wealth are the staunch defenses of journalists and other fans of the field. In response to this line about billionaires being “policy failures,” The Economist, usually the soul of cautious analysis, wrote that, well, not all billionaires fell into that category.

The magazine did acknowledge that “the American political system is riddled with headline-grabbing lobbyists,” and that about a fifth of America’s billionaires exploited government largesse or market failure.

The drive to accumulate wealth is always with us. The most recent case concerns would-be cryptocurrency kingpin Sam Bankman-Fried, who is currently cooling his heels in a Bahamian prison awaiting extradition to the US on fraud charges.

In its brief heyday, Bankman-Fried was a proponent and promoter of the concept of “effective altruism,” which held that if the purpose of life is to do good, then the moral imperative is to make as much money as possible , so one can give it away.

Among the many problems with this notion is that billionaires tend to give their money to causes that benefit them personally, rather than the public interest. They fund personal vanities like space travel with billions of dollars and fight efforts to increase their employees’ incomes through, for example, unionization, to the last drop of their blood. Effective altruism provides a pseudo-intellectual justification for this kind of self-management: the more resources billionaires accumulate, the more good they can do.

To the extent that their accumulated wealth deprives the public of resources through low tax rates and ineffective tax enforcement, they deprive the public of the rational application of those resources where they are most needed. Consider the tax breaks offered to donors at elite private universities: How much more money does Harvard need, compared to, say, the University of California?

Billionaires want everything their way. Influence on public affairs without responsibility. Advertising i privacy They want respect, but they don’t always feel such a strong need to earn it.

If they want to influence society at a level commensurate with their wealth, they will have to open their private lives and private business practices to more public scrutiny.

It comes with the territory. Can they please stop complaining?

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