There was a time when corporations were more influential than they are now.
But at the moment … they are a beleaguered minority, rather than the dominant majority.
— Milton Friedman (1912 – 2006), Free to Choose, PBS, 1980.
We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can't have both.
— Louis Brandeis (1856 – 1941), Associate Justice, US Supreme Court.
Lewis Powell (1907 – 98)
Associate Justice (1972-87), US Supreme Court
The most disquieting voices joining the chorus of criticism [of the free enterprise system] come from perfectly respectable elements of society:
- from the college campus,
- [from] the pulpit,
- [from] the media,
- [from] the intellectual and literary journals,
- [from] the arts and sciences, and
- from politicians. …
[The] time has come … for the wisdom, ingenuity and resources of American business to be marshalled against those who would destroy it. …
[As] every business executive knows, few elements of American society today have as little influence in government as the American businessman, the corporation, or even the millions of corporate stockholders. …
Business must learn the [lessons,] long ago learned by labor and other self-interest groups: …
- that political power is necessary;
- that such power must be [assiduously] cultivated; and
- that when necessary, it must be used aggressively and with determination …
The threat to the enterprise system is not merely a matter of economics.
It also is a threat to individual freedom. …
As the experience of the socialist and totalitarian states demonstrates, the contraction and denial of economic freedom is followed inevitably by governmental restrictions on other cherished rights. …
Under our constitutional system, especially with an activist-minded Supreme Court, the judiciary may be the most important instrument for social, economic and political change.
(Attack of American Free Enterprise System, Memo to the US Chamber of Commerce, 23 August 1971)
The Golden Rule: He who has the gold rules
(Alex Gibney, Park Avenue: Money, Power and the American Dream, 2012)
(Edward Wolff, CEO to Worker Pay, A Century of Wealth in America, Harvard University Press, 2017)
(Executive Excess 2006, 13th Annual CEO Compensation Survey, Institute for Policy Studies & United for a Fair Economy)
Dan Ariely (1967) [James B Duke Professor of Psychology and Behavioral Economics, Duke University]:
[In] 1976 the average CEO was paid 36 times as much as the average worker.
By 1993, the average CEO was paid 131 times as much. …
[In] 1993, securities regulators [started forcing companies] to reveal details about the pay and perks of their top executives.
The idea was that once pay was in the open, boards would be reluctant to give executives outrageous salaries and benefits. …
[However, as] salaries became public information, the media regularly ran special stories ranking CEOs by pay.
[This] publicity had CEOs in America comparing their pay with that of [their peers.]
In response, executives' salaries skyrocketed.
[Compensation] consulting firms … "helped" [by advising] their CEO clients to demand outrageous raises.
The result?
Now the average CEO makes about 369 times as much as the average worker — about 3 times the salary before executive compensation went public. …
Instead of causing shame, every new outrage in compensation encourages other CEOs to demand even more.
(Predictably Irrational, Harper, 2009, p 148-50, emphasis added)
Jane Mayer (1955):
[Steve Schwarzman, chairman and CEO of Blackstone,] made $398.3 million in 2006, which was 9 times more than the CEO of Goldman Sachs.
On top of this, his shares in Blackstone were valued at more than $7 billion.
(p 254)
The [carried interest] loophole was in essence an accounting trick that enabled hedge fund and private equity managers to categorize huge portions of their income as “interest,” which was taxed at the 15% rate then applied to long-term capital gains.
This was less than half the income tax rate paid by other top-bracket wage earners.
[It is] estimated that the hedge fund loophole [costs] the government over $6 billion a year — the cost of providing health care to three million children.
Of that total … almost $2 billion a year … went to just 25 individuals [— an average tax concession of $80 million each.]
(p 255)
[In] December 2010 … Republican negotiators insisted on cuts in estate taxes that would cost the Treasury $23 billion and save some 6,600 of the wealthiest taxpayers an average of $1.5 million each.
The demand didn’t materialize out of thin air. …
[Beginning in 1998, the] Kochs and the DeVoses … joined with [15] of the other richest families in the country, including the Waltons of Walmart and the Mars candy clan, in financing and coordinating a massive, multiyear campaign to reduce and eventually repeal inheritance taxes.
[These] 17 families stood to save $71 billion from the tax change, explaining why they willingly spent almost half a billion collectively, lobbying for it …
(p 290)
From 2006 until 2009, Chelsea Clinton, the daughter of the former president, worked as an associate at Avenue Capital Group, a $14 billion private equity and hedge fund firm.
Marc Lasry, co-founder of Avenue Capital, was a major Clinton supporter as well as a $1 million investor in a fund managed by the Clintons’ son-in-law, Marc Mezvinsky.
The Clinton administration had been rife with Wall Street tycoons.
(Dark Money, Doubleday, 2016, p 323)
The Four Hundred
Few members of New York’s old money crowd were more suspicious of the newly wealthy than Caroline Schermerhorn Astor, whose ancestors had arrived from the Netherlands in 1630. …
It was Mrs Astor who would decide [who was] worthy of ascension into the highest tier of society.
It was a very exclusive club, roughly the number of guests Caroline Astor could comfortably host in her ballroom.
Four hundred was the magic number.
— Sarah Holt, The Gilded Age, PBS American Experience, 2018.
Jane Mayer (1955):
A 2008 study of the wealthiest 400 taxpayers … showed that they earned an average of $202 million and paid an effective income tax rate of less than 20%. …
In other words, the effective tax rate on earning $202 million was lower than the rate paid by Americans earning $34,501 a year.
(Dark Money, Doubleday, 2016, p 288)
Robert Lenzner:
The top 0.1% — about 315,000 individuals out of 315 million — [capture] about half of all capital gains on the sale of shares or property after 1 year …
[These] capital gains make up 60% of the income made by the Forbes 400 [and are at taxed at 15%.]
(The Top 0.1% Of The Nation Earn Half Of All Capital Gains, Forbes, 20 November 2011)
George Domhoff (1936) [Distinguished Professor Emeritus, Sociology Department, University of California, Santa Cruz]:
[The] average income of the top 400:[A 6 fold increase in 15 years.]
- tripled during the Clinton Administration; and
- doubled during the first 7 years of the Bush Administration.
(Wealth, Income, and Power, September 2005)
Milton Friedman (1912 – 2006):
The strongest argument for free enterprise is that it prevents anybody from having too much power …
(The Tyranny of Control, Free to Choose, Episode 2, PBS, 1980)
| Charles Koch (1935) | Koch Industries | $44.7B |
| David Koch (1940) | Koch Industries | $44.7B |
| Steve Schwarzman (1947) | Blackstone | $11.3B |
| Philip Anschutz (1939) | Qwest | $11.0B |
| Ken Griffin (1968) | Citidal | $7.0B |
| Richard DeVos (1926) | Amway | $5.8B |
| Diane Hendricks (1947) | ABC Supply | $3.6B |
| Ken Langone (1935) | Home Depot | $2.9B |
| Steve Bechtel (1925) | Bechtel | $2.7B |
| Stan Hubbard (1933) | Hubbard Broadcasting | $2.0B |
| Joe Craft (1950) | Alliance Resource Partners | $1.4B |
| Total | $137.1B | |
Jane Mayer (1955):
Of the 200 or so participants meeting secretly [at the Koch's donor summit in Aspen in June 2010,] at least 11 [of the "investors"] were on Forbes’s list of the 400 wealthiest Americans.
(pp 256 & 411)
Fewer than 200 extraordinarily rich individuals and private foundations [account] for the $750 million pooled by DonorsTrust and its sister arm, Donors Capital Fund, since 1999.
(p 347)
DonorsTrust:
You wish to keep your charitable giving private, especially gifts funding sensitive or controversial issues.
Set up a DonorsTrust account and ask that your gifts remain anonymous.
Know that any contributions to your DonorsTrust account that have to be reported to the IRS will not become public information.
Unlike with private foundations, gifts from your account will remain as anonymous as you request.
(p 206)
On November 4, 2014, the investors of the Koch network finally got their money’s worth.
Election Day proved a Republican triumph.
The GOP picked up 9 seats in the Senate, winning full control of both congressional chambers. …
From this point on [Obama] would be largely relegated to playing defense against conservatives’ efforts to roll back everything his administration had done before.
(p 370)
Whether their motives were virtuous or venal, in the course of a few decades a handful of [fabulously wealthy] right-wing philanthropists had changed the course of American politics.
They created a formidable wealth defense movement, which had become a sizable part of what [Peter Buffett] dubbed “the charitable-industrial complex.”
(p 377)
Art Pope (1956) [Former Director, Americans for Prosperity]:
America does not have an aristocracy or a plutocracy.
(p 343)
In a generation, we’ve shifted the public-policy debate in North Carolina from the center-left to the center-right.
(Dark Money, Doubleday, 2016, p 338)
Jane Mayer (1955):
For several years, [Paul Ryan] had been advocating radically deep cuts in government spending, including to Medicare and Medicaid, the two main government health programs for the elderly and the poor. …
His ideas were wildly popular with most of the wealthy donors.
As the country’s highest taxpayers, they would be the biggest beneficiaries of the tax savings produced by spending cuts.
[Needless to say,] none of them needed to rely on government social services for their health or welfare.
(Dark Money, Doubleday, 2016, p 266, emphasis added)
John Galbraith (1908 – 2006):
No legislation in American history [has been] more bitterly [opposed by business] than the … Social Security Act.
(A History of Economics, Penguin, 1987, p 217)
