You Didn’t Build That

Last week, Forbes magazine reported that 21-year-old Kylie Jenner was the youngest “self-made” billionaire ever. She has pulled in at least $1 billion from her makeup company Kylie Cosmetics.

Jenner bent over backwards to say that she’d started her company with her own money which she earned through modeling. “None of my money is inherited,” she said in a recent interview. It should also be pointed out that Forbes’ definition of “self-made” is farcically broad, meaning simply that her business hadn’t been directly inherited.

It’s still obviously absurd to attach the phrase “self-made” to Jenner, who is part of the wildly rich and famous Jenner-Kardashian clan. While she may be savvy about marketing and promotion, Jenner grew up in one of the wealthiest ZIP codes in the world with access to every advantage money could buy and then some, including years of self-promotion on a successful reality television show. The value of her makeup company lies in the celebrity she inherited from her family if not by direct inheritance of money or assets.

This isn’t just about dunking on Jenner or her popular lip kits, though. She is just the most outlandish example of a bigger problem: the persistence of the idea that the wealthy succeed because of their own genius, hard work, and perseverance. Even Donald Trump, whose parents gave him hundreds of millions of dollars, has managed to promote himself as “self-made.”

The fact of the matter is: wealthy people are mostly wealthy because their parents are wealthy. The correlation between parents’ and children’s wealth is well-established in the research.

Are wealthy parents just passing on some super-amazing genes to their kids that enable them to go on to great success by virtue of their brilliance (That’s Trump theory anyway)? Or is the environment a child is raised in the reason for their success as adults?

The environment you grow up in, the quality of education your parents can afford to give you, the investments they can make in you, the relative affluence of your neighborhood, etc. is almost twice as important as biology, economics professor Sandra Black and her coauthors write in a working paper put out this month by the Centre for Economic Policy Research.

For their paper, the researchers looked at the parents of adopted children in Sweden, where there is robust data on both adoption and wealth. They examined kids’ biological and adoptive parents. Then they looked at the wealth of those adopted children at around age 44, old enough to have established themselves as adults, but generally young enough to have not yet inherited their parents’ money. (They only looked at adopted children who still had at least one living parent.)

Black and her cohorts found that the adoptive parents’ wealth was a much better predictor of whether or not their adult child was wealthy.

The outcome seems obvious, wealthy parents have the money available to invest in their children, in schooling, extracurricular activities, and college funds. They also have connections to other wealthy people that poor and middle-class people simply don’t have. This means better access to investors in your new company, for example, or a leg up getting into an Ivy League school.

Or you know, access to lucrative modeling contracts.

Kids with wealthy parents also have a fabulous safety net. And they’re apt to take more chances, plowing all their money into a lipstick company or overpaying for a piece of New York real estate for example.

Entrepreneurs are much more likely to come from wealthy families, where they feel more comfortable gambling for success. Trump’s father routinely rescued him from financial collapse. Though Jenner’s parents pushed her to go out on her own, I doubt they would leave her on the streets to fend for herself if things went belly-up.

To be sure, Black says, environment isn’t the only reason someone like Jenner can make $1 billion. You do still need some amount of intelligence or savvy to succeed.

Personally, I think Donald Trump and his ne’er-do-well kids are pretty definitive evidence against that. But I’m not a professor of economics.

Ban the Billionaires?

The idea that the rich have too much wealth at the expense of everyone else has taken off in recent months. There’s even talk of “banning billionaires” and there are extremely popular policy proposals looking to significantly raise taxes on the ultra-rich coming from legislators like Senator Elizabeth Warren and Representative Alexandria Ocasio-Cortez.

Americans have supported raising taxes on the rich for a long time. But the ultra-rich, Republicans, and anti-tax extremists like Grover Norquist have kept that popular sentiment at bay. Partly with rhetoric about “freedom” and partly by philanthropic deeds, not to mention a right-wing media ecosystem (itself full of rich pundits) that portrays them as benevolent, self-made geniuses.

Then came Lord Dampnut.

With (self-proclaimed) billionaire Donald Trump occupying the White House and daily revealing what a profound moron and amoral con-man he is, the veil has been torn off. It’s easier to see that many billionaires are grifters that at best, stumbled into their wealth rather than the self-made entrepreneurs that we’ve been told they are.

Before, Americans wanted to tax the rich to pay for specific policies like Medicare-for-all, public college, and repairing infrastructure. Now, Americans are beginning to see it as a moral issue. These days, the reasoning goes that taxing the ultra-wealthy will tamp down extreme wealth inequality. They believe that someone shouldn’t start out with that much of an advantage in life, especially given what kind of people they turn out to be.

It’s a truism in American politics that there’s a natural tendency for public opinion to swing in opposition to whichever party is in power. Still, I think it’s fair to say that the public’s reaction to Trump has been more intense than it would’ve been under a President Jeb Bush. Trump has energized liberals and progressives on issues, like women’s rights, in resistance to the president, which has inspired record numbers of women to run for public office.

There are also other factors, such as outrage over the Great Recession, the Occupy Wall Street protests, and Senator Bernie Sanders’ 2016 campaign which focused heavily on wealth inequality pushing the Democratic Party (the rank-and-file at any rate) to the left regarding economics. Also, our rich president, his super-rich Cabinet, and the millionaires on mainstream news TV have repeatedly demonstrated how out of touch they are with regular people when it comes to financial issues.

Finally, Trump has set himself apart from all other modern presidents by keeping his tax returns secret, bringing up daily questions about what he is trying to hide. Inadvertently shining a constant light on how the rich often get away with not paying their fair share.

Lord of the Lattes

Howard Schultz, the former Starbucks CEO, current wannabe presidential candidate, and insanely rich person, doesn’t want you to use the term “billionaire” when talking about him or other insanely rich people.

Schultz, whose presidential platform currently consists of: less taxes for me, no healthcare for you, and buy my book please, was asked if he thought billionaires had too much power in America on Monday at a book event hosted by CNBC host and New York Times reporter Andrew Ross Sorkin.

Schultz responded:

“The moniker ‘billionaire’ now has become the catchphrase. I would rephrase that and say that ‘people of means’ have been able to leverage their wealth and their interest in ways that are unfair, and I think that speaks to the inequality but it also speaks to the special interests that are paid for people of wealth and corporations who are looking for influence.”

I seem to recall the Republicans trying to do something like this with “job creators” and it not going all that well. In fact, I would like to propose a new policy where every time Howard Schultz says something profoundly tone deaf, the top marginal tax rate goes up another 2%.

It doesn’t appear Schultz noticed the irony that he is a billionaire – sorry, “person of means” – who is able to leverage their wealth into getting undue amounts of press and TV time trying to become a presidential contender. All this despite having no political experience or any sense of self awareness.

Currently, Howard Schultz’s approval ratings among Democrats, Republicans, and Independents is hovering around 4%.

I have a better idea for an alternate term for billionaire: “rich fuck”

But why is the Medium “Grande”?

There’s been a lot of talk over the last several months of a number of multi-billionaires thinking about throwing their hats in the ring for president in 2020.  Michael Bloomberg has reportedly thinking of running in the Democratic Party as an alternative to all the crazy lefties and progressives running (good luck with that), and on Sunday, Howard Schultz, the former CEO of Starbucks, launched some trial balloons to gauge interest in his run. In his case as a “centrist independent.”

Yeah, Schultz is apparently one of those insufferable “above it all” centrists that think political disagreements are just petty squabbles that can be solved through finding the “middle ground.” You know, like the middle ground between putting migrant children in prison camps and…not.

What the hell are these guys thinking? Do they really think that voters, particularly Democrats and Independents, are yearning for another egotistical rich dude to sit in the White House after the disaster that has been the Trump Regime?

The idea of “running the government like a business” has been a popular trope with Republicans for years, but given how that philosophy has been going under recent Republican administrations, it seems that experiment has failed. I don’t think that idea has a chance of resonating with people who are going to be selecting the next Democratic nominee for president, especially after Dubya and Lord Dampnut.

Granted, both George W. Bush and Donald Trump are failed businessmen; Bush couldn’t find oil in Texas and Trump went bankrupt running casinos, but I think most people, especially on the left, recognize that the government isn’t supposed to be a money making enterprise. The government is supposed to serve its citizens.

Republicans have been trying to privatize the United States Postal Service for years but have been stymied because enough people understand that the Post Office isn’t supposed to make money. They get that the Post Office is supposed to deliver mail everywhere in the U.S. regardless of where you live, and privatizing it will encumber that mission with a profit motive.

America is going to have to do a lot to un-fuck itself once Trump’s reign is finally over. It’s going to need an actual leader who cares about doing the right thing for the people. What it doesn’t need is someone who’s main skill is putting a lot of money in their bank account, or someone who serves them in an effort to get more money in theirs.