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- [00:01]
A
Hey there, it's Shemitha here. I am still out on parental leave but wanted to bring you this episode from our archives. It's a fascinating look at the ever growing ultra wealthy class in America. I hope you enjoy it. This is in conversation from Apple News. I'm Shemitah Basu. Today, why Americans Love to Hate the Ultra Wealthy. In the last weekend of June, billionaire Jeff Bezos, the founder of Amazon, got married to his fiance Lauren Sanchez in an elaborate days long celebration in Venice, Italy. Festivities included a pre wedding foam party on their $500 million yacht and a pajama themed afterparty where guests were serenaded by Usher. The event was covered by news outlets across the world, tracking who was attending, what they were wearing, and the protests that came with it from people who were horrified by the ostentatious display of wealth in the famously sinking city.
- [01:10]
B
That wedding felt like the confluence of about 50 years of decisions around politics, around wages, around wealth, around taxes, all of which brought it to the point of making that kind of wedding possible.
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A
That's Evan Osnos, a reporter for the New Yorker. He wasn't a guest at the wedding, but he's been following Bezos and the movements of the ultra wealthy for years. His new book, the Haves and have Yachts is a collection of his reporting on America's billionaires, from their excessive lifestyles to their disproportionate influence on politics. He says that when it comes to wealth, we're at a moment unlike any other in history.
- [01:50]
B
We are living in a new Gilded Age in the sense that almost never before in 250 years of American history have we had a group of people with as much money concentrated in such a small group of hands.
- [02:06]
A
Evan and I talked about what this obsession with wealth means for our culture and our politics and the big budget bill that's now been signed into law. At the time we chatted, it was still winding its way through Congress. I started by asking Evan to put this in context for us. What does ultra wealth look like today in America and what does it mean for, well, everyone else?
- [02:33]
B
Well, the numbers tell the tale. In 1990, there were 66 billionaires in America and today there are more than 800. And in some ways that's a sign of tremendous wealth creation. But in that same period of time, the median hourly wage for Americans has only gone up about 20%. And as a result, we now have a gap between the rich and the poor that's really larger than any moment we've ever recorded in our history. Ten years ago, there was nobody in the world who had more than $100 billion. That was just. It didn't exist. We didn't have centibillionaires. Today, there are more than 15 of them. And in fact, just take the example of Elon Musk, the richest man in the world. He had about $10 billion 10 years ago. Today he has more than 400 billion. And in fact, this isn't just an extraordinary growth by modern standards. I spoke to archeologists about it who study inequality all the way back to the Neolithic age, and as one of them said to me recently, the people who built the pyramids were living in a less unequal society. So we're really in. In a way, uncharted territory, actually.
- [03:48]
A
Wow. Wow. Fascinating. I mean, Evan, you have been yourself writing about this topic, thinking about this for years now. You've been a foreign correspondent. You have covered politics extensively for the New Yorker. What is it about this topic, the ultra wealthy, the ultra rich in America, that keeps you coming back to it and examining it?
- [04:12]
B
I think there's something very American about the focus on wealth. I mean, look, this is baked into the American dream. As early as this country was founded, there was this idea that we would be unlike Europe in the sense that you could come here with nothing and maybe make your way to the very top. I mean, you see that even today, in the way that we think about wealth, we have a kind of ambivalence about it. I mean, if you look at polls, you'll find that about 59% of Americans say that billionaires are making the country more unfair. And an identical share, about 59%, say they want to become billionaires themselves. And in fact. Right. Sometimes it's the same person who feels both ways. I think that's. It's a big fact of our time, that complicated feeling about it. But I think it's also the fact that that's part of the reason why there is a growing sense of frustration in this country today. And we see this reflected all across our culture and in our politics, that people feel a little bit as if that mythology's wearing thin. It feels a little bit like that sort of bargain of the American dream. The idea that if I get myself here, maybe I can get to the. That's no longer true, because, frankly, the numbers tell us it's not. I mean, if you were a baby born in 1940, you had a 90% chance of outearning your parents, but today, that number has dropped by more than half. In fact, millennials And Gen Z are some of the first generations to grow up at a time when they're not really guaranteed to out earn their parents. And so there is a growing sense that as we see the images on social media and in our lives on television of this extraordinary wealth, we are also aware on a level that's either implicit or explicit that that opportunity is drifting further and further out of reach.
- [06:03]
A
Well, I definitely want to talk about how this is colliding with our political moment and we'll get there in just a minute. But let's start with the first essay in the book. And I love the title of your book, the Haves and have Yachts. It is the title of the first essay in the collection. I remember when this essay first published in the New Yorker. And it's about the world of luxurious, almost unthinkably luxurious super yachts. You spoke to the owners of these kinds of super yachts, but you also spoke to some of the crew members. What did you learn from speaking with these people?
- [06:36]
B
Well, they really are kind of an amazing species of machine. These are longer than a football field. They cost the better part of a billion dollars. I think the biggest thing to know is just that the world on these yachts is quite different, different really than the world that we inhabit on land. I mean, as both owners and crew members put it, to me, it's really much more like the world of a 19th century British aristocratic household, like, you know, Downton Abbey or something, than it is on land. Because you might have, say, 12 guests staying on a yacht, but then they'll be attended by 50 or 60 staff members. And as one owner of a yacht said to me, he said, you know, you really don't see that kind of ratio on land anymore. And I, I think there's a way in which there's become a sort of arms race among the owners to get bigger and more luxurious experiences for themselves and for their guests. In addition to the idea that you'll have, obviously salons and spas and what's known as cryo saunas, which can cool you down to very low depths, or you have helicopter pads where you'll put on your ski stuff on the boat and then they'll fly you in a helicopter to the peak of a mountain so that you can ski down. But I think the one that really struck me perhaps was that the COVID pandemic heightened the fears of some of the yacht owners that they might find themselves vulnerable on land, and so maybe their yachts could become the safest place for them. And so a lot of them are kitted out with very advanced medical equipment, things that allow you to detect pathogens in your guests or in the air. And if need be, you can get surgery in some cases using robotic instruments on the boat, being manipulated by a doctor far away who is doing his work essentially over the digital Wi fi.
- [08:35]
A
Wow.
- [08:36]
B
So, you know, that's something new.
- [08:38]
A
That is something else indeed. Well, let's take a few steps back. You laid out by the numbers just how much wealth as a phenomenon has exploded in the past 10 years alone. Certainly 30 years. But I mean, fundamentally, how did we get here? How did we arrive at this place where so much wealth could be amassed by a number of people?
- [09:03]
B
It really gets to the culture at the top of our economic ladder. You know, back in 1965, it's easy to forget this now, but the CEO of a typical large public company would make on average about 20 times what the frontline workers at those companies made. You know, interestingly, I spoke to somebody whose father had been the CEO of General Electric, in fact, back in the 1960s, and she remembers her parents, you know, he would make a decent salary, but it was much closer to between 10 and 20 times what a frontline worker made. And, and his wife used to say, you know, we have all we need. What, what do we really need more for? There's a different attitude, frankly, today. I mean, according to the latest numbers, the median CEO of a large public company makes about 350 times what a frontline worker makes. That's just a profoundly different arrangement of wealth in society. And the reason why they make more has to do with how we reward CEOs, how we imagine they are worth that much money. When Jack Welch, who was later the CEO of General Electric, retired, he got one of the largest exit packages in the history of American commerce. I mean, hundreds of millions, billions of dollars.
- [10:22]
A
And you also write about just the incredible tools for wealth protection that have been strengthened over the years, frankly. And it sounds like, I mean, I'm curious to understand this better. You write about the Getty family and some other like huge, huge, mega wealthy families from decades and in fact centuries ago, and how the wealth has been passed through generations and how that wealth protection model and some of those laws have been strengthened over the years. But tell me a little bit more about these tools for protecting your wealth and why have they been strengthened over recent decades?
- [10:59]
B
Yeah, it turns out, frankly, that if you have the money to afford the right kind of lawyers and tax advisors, you can assemble a toolbox of techniques that really protect you from having to pay many of the taxes that other people pay. Just to give you a couple of prime examples, I mean, according to ProPublica, Jeff Bezos, at one point, even after he was worth $18 billion, had been able to engineer his income down to such a small number that he actually qualified for a child tax credit at one point. And during the pandemic, in fact, 18 billionaires, according to ProPublica, were able to avoid some of the ordinary measures of income to such a point that they qualified for Covid stimulus funds. Now, the fact is that the way to do it is that you basically have to recognize that we have an income tax in this country. We don't have a wealth tax. And so when you hear somebody, and we often hear about this in the news, somebody will announce, you know, that they're only going to take a salary of $1 a year. Right. And you think, oh, wow, well, that must be some big act of philanthropic generosity. Well, no, actually, it means partly that they no longer have to pay much in the way of income tax.
- [12:11]
A
Right.
- [12:11]
B
I think it's also remarkable that there have been states in this country, like South Dakota and Nevada, that have really compet to try to attract wealthy families and individuals so that they'll put their trusts there and then will be able to avoid some of the taxes in other states. Just to be really clear about it, ever since the Middle Ages, there was a law in Europe called the law against Perpetuities. Perpetuities meaning fortunes so large that they pass down and create economic dynasties. This was something that even the royals back in Europe decided was just probably no good. It was going to put too much money in the hands of too few. Well, that more or less held for a few hundred years, until about just in the last couple of decades when South Dakota, Nevada and other states have started to get rid of the law of perpetuities. And as a result, if you have a trust in one of those states, you can actually end up passing down a huge amount of your fortune without paying much in the way of inheritance taxes, to the point that actually Gary Cohn, who was the economic advisor for Donald Trump in the first term, he told members of Congress that in effect, the estate tax has now become so easy to avoid that, as he put it, only morons pay the estate tax.
- [13:28]
A
I mean, what is the argument in favor of this extreme kind of wealth accumulation? Because some people will make the argument right. They will say that it drives innovation, they will say that it drives entrepreneurship. It can drive economic growth that will trickle down. I mean, what good arguments have you heard? Maybe ask it that way, and then if you want to or if you can. Have you poked holes in that argument?
- [13:56]
B
Well, I think the case for billionaires is that it is the emblem and the reward for terrific innovation. So, you know, somebody like Mark Zuckerberg, who can be the richest entrepreneur of his generation, is a reflection of how much money he's been able to generate from his own innovation. And, look, you hear this very often from people who worry about trying to reshape the distribution of wealth in this country, that it's going to tamp down innovation. It's going to say to somebody, well, why do I need to work that hard? Why should I risk the capital that goes into building a big company if I can't ultimately take out the reward that I want out of it? I think that the counter argument is that we've been through a similar moment in our own history. I mean, at the end of the 19th century, in the beginning of the 20th century, we had people who were making enormous misfortunes, like John D. Rockefeller and Andrew Carnegie. They were some of the richest people in the world, and they had innovated tremendous technological achievements for their time. But there was also a recognition that they had, frankly, that if the country continued on a path in which the gap was getting wider and wider between the poorest and the richest, that it probably would drive the country apart. You know, part of it was they looked at what was happening even in the Russian Revolution, and they said, well, that. That's not something we want to have here. Andrew Carnegie worried about what he called the emergence of rigid castes with mutual ignorance, meaning people in our country who lived in such different experiences from the top and the bottom, that they just didn't have much appreciation or understanding of one another. And so he started using his fortune to build libraries across the country, and he devoted a lot of his money to philanthropy, and so did John D. Rockefeller. So maybe one of the takeaways is not that it's the creation of this wealth that is really the biggest problem, it's what happens to it after it's made. And is there a way that that can be driven into society to ensure that we have a 21st century that's as prosperous and innovative as the 20th century, which was a product partly of those smart choices by people like Carnegie and Rockefeller to ensure that their wealth did not come at the expense of others.
- [16:15]
A
Mm. Well, let's talk about what this has all meant for our politics. You've alluded once already to the election of Donald Trump in his first term in 2016 as being a pretty big pivot point in this whole conversation. But. And much has been made about his second inauguration and just the optics of it, of seeing so many ultra wealthy people, many of them from the tech world in our country, up on the stage on Inauguration Day, flanking the president, a very different visual than we have seen in past inaugurations. Usually we're used to seeing our elected lawmakers up there on the stage. What is your take on what's happening right now as we see these ultra wealthy people getting more visually and openly intertwined with our politics? It's not to say that it hasn't happened before, but certainly something new and different is happening now, right?
- [17:10]
B
Yeah. And I think it's worth stating very clearly how it's different than before, because it's tempting to just sort of shrug and say, well, we've been down this road, so maybe this is just kind of within the band of normal changes. Well, to put it in Precise perspective, in 2004, billionaires in the United States put about $13 million with an M into the presidential election year. It felt like a lot of money at the time, but 20 years later, because of decisions by the Supreme Court and other reasons, you now have 200 times as much coming from billionaires in this country. $3 billion went into the 2024 political race, so they have a much larger impact on politics. I also think, we know from history that when you have big divisions of wealth and experience in this country, that there are politicians who use that to put people against each other, to say, you know, the problem is not us at the top. The problem, in fact, are the people who are just below you on the ladder. And I think that one of the arguments that you see today is that in a way, we're witnessing the deflection of political anxiety away from the real sources of distress and pointing it at some of the most vulnerable people in this society. I mean, the idea that there is now a bill making its way through Congress that would kick millions of people off of their health insurance, cut off food stamps for people who rely on them, while at the same time delivering a tremendous tax cut to wealthy Americans, let's be honest, people like me is bizarre to me. It doesn't really strike me as the makings of a prudent rationale system to build national strength over the long term.
- [19:02]
A
So why do you think this message is resonating with the Republican Party base, with Donald Trump's supporters because, I mean, at the end of the day, of course, also President Trump is himself a billionaire and came in on this message of protecting the working class, of appealing to the working class, as we saw in this most recent election, built a broader coalition than ever before voting for him from that base. Why is this message appealing?
- [19:32]
B
It gets to the core of how Americans think about wealth. I mean, I've talked to a lot of Trump voters over the years over the last decade. It's a big part of my daily job. And I think one of the things that I've discovered is that people will often say, you know, look, I think he imagines the most of me. He sort of imagines that maybe I could somehow live like him. And I think that gets to this strange attitudes that Americans have about the quote, unquote, the elite. You know, in some ways, I feel like we love the adjective elite. We love to talk about elite Navy SEALs, but we certainly don't like the notion of a small group of people who control the culture and the politics and the economic opportunities. And what Donald Trump has done over the course of his political career is, in fact, to use his own money and privilege and inherited opportunity as an asset to his political identity by saying, look, I'm part of that elite, and so I'm going to tell you how to join it. I'm going to tell you how it's corrupt. I'm going to tell you how to get in through the side door. And that is just an entrancing opportunity for people. And I think that they continue to hope that somehow he'll deliver on that promise, even if the facts are that in the eight years since Donald Trump was elected, the first time, the net worth of America's billionaires more than doubled. And that's not true for the other Americans.
- [21:05]
A
Well, let's talk about the money that ends up in our politics now. I mean, this is something that sticks in my mind. One of President Biden's last comments as president. In that statement, he issued a warning about the rise of oligarchs in our country.
- [21:23]
B
Today, an oligarchy is taking shape in America of extreme wealth, power and influence that literally threatens our entire democracy, our basic rights and freedoms, and a fair shot for everyone to get ahead.
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A
And I remember being struck by it because it both felt like something I hadn't heard a president say before. And in a weird way, like, way too late, frankly.
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B
Yeah.
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A
What are we seeing unfold right now in our politics? And have all the warnings just come too late to do Anything about it?
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B
Yeah, that's a big deal. Scholars who study that subject said, that's the first time that phrase has been uttered from the Oval Office.
- [22:07]
A
So it really was the first time.
- [22:08]
B
Yeah, and there's a reason why he was talking about it. For most of American history, we've had what could be described in theoretical terms as a civil oligarchy, which may sound wonky, but what it really means is that we have very rich people. And let's remember, the country was, of course, founded with the vote only being available to rich white men of property. So from the beginning, there was an emphasis on giving more power to the rich. But over time, as the gap has gotten larger and as the power that money can buy in politics, because of the role of campaign donations and of influence in Washington, it's gotten so much more pronounced that we're now entering an era that is much more like what scholars call sultanistic oligarchy. Sultanistic oligarchy is one in which you have one oligarch. Look, our president is a billionaire who is essentially agreed upon by the others to rule and to make decisions that are good for their business. And I think that we've seen this in most dramatic form in Russia, actually. Vladimir Putin is a classic sultanistic oligarch. Or in the Philippines in the 1970s and 80s with Ferdinand Marcos. And what's worrisome about that is that you see that over time, that the politics become more personalized. It's more about what that person at the top wants personally, what they don't like. You know, we all now find ourselves in Washington, where I live. We're hanging on the words of every tweet, of every social media post from the president, rather than saying, okay, what are the 435 members of the House of Representatives? What do they think and how are they operating?
- [23:48]
A
Right?
- [23:49]
B
So that's a change, and that's worrisome. I mean, not to get too dark about this, but it's worth keeping something in mind, which is that we've seen what happens to democracy and to politics when you get enormous gaps between the rich and the poor. In fact, if you look at the story of ancient Rome, there was a great scholar named Ramsay McMullen who was once asked, you know, what explains the collapse of Rome? And he said, it took 500 years, but you could distill it into three words. He said, fewer, had more. I think that's a bit of a cautionary tale for us. And we've. In our history, we've figured out how to avoid that worst case scenario in the past, and it may be time for us to relearn those lessons again.
- [24:35]
A
Yeah. What would that look like for us right now?
- [24:38]
B
Well, about a hundred and some years ago, we had the advent of what was known as the Progressive Era. You know, we did things like we changed how Congress worked. We had the direct election of senators for the first time. We created a, an income tax which we'd never had in any permanent way in this country. We also began to build the social safety net. And the Progressive Era gave way to the New Deal. And under the New Deal, we began to do things like make sure that we were protecting workers at the bottom of society so that they could unionize and protect themselves against much more powerful interests. So in some ways, the lessons for us of our own history are that when things look like they're moving in an unsustainable direction, it may be that that's time for us to begin to make changes around the edges of our politics and law, to really recognize that we're not doing enough to ensure that people at the bottom have the opportunity to build and grow and benefit in the way that our national mythology tells them they should.
- [25:40]
A
I mean, just it doesn't seem right now, at least on the national stage, that there is a lot of political will in the direction of those kinds of policies that you're describing. Right. I mean, we see it in the tax and spending bill that's currently being reviewed and in debate in Congress.
- [25:57]
B
Well, I think actually you see some cross currents. You're exactly right. We see this bill moving through, but at the same time, you just had some pretty dramatic demonstrations of distress, of economic distress in this country. I mean, Bernie Sanders and AOC have been going. Alexandria Ocasio Cortez of New York have been going around this country holding rallies in largely Republican areas and getting enormous crowds. In some cases. It's republic who are showing up, who say, look, I'm, I'm worried about where this country's headed. I actually don't want to add this much debt. I don't want to be operating in deficit spending of the kind that this bill is doing. And you just saw in New York City that Democratic candidate Zoran Mamdani was able to really stun political analysts in the Democratic primary by running on basically one issue above all, which is affordability and cost. The way that we explain those two facts is that our politics right now really does not reflect the public will when we get to Washington because of the role of money, because of the sheer avalanche of cash that comes in that shapes the decisions of members of Congress and ultimately presidents. That's the reason why Congress doesn't actually do things that are overwhelmingly popular. I mean, we know on issue after issue, things like, like achieving more safety around guns by passing gun control legislation, by making steps towards mitigating climate change. We simply know that these are popular policies, but they don't actually come through. And the reason they don't come through in law is because it's a gruesome fact. But we now have people in our society, Elon Musk being the prime demonstration, who, as his own tweet put it, was able to determine the result of the 2024 presidential election, as he said. I mean, that's an astonishing thing to say out loud, but it's one that we should be taking very seriously because it's never been as acute and explicit as it is today.
- [28:03]
A
You write that while reporting on this topic and thinking about this topic, you often would go back to this question of what would future historians make of this generation, of this moment? What do you think the answer to that is? What do you think will be said about how we live today?
- [28:23]
B
I sometimes had this feeling almost viscerally when I was watching a giant super yacht, because I would think to myself, someday in some future generation, there will be archeologists of the kind that I talk to now about the past, and they will be trying to understand us through the things we leave behind. And they'll sift these giant machines from the sediment and they'll say, well, what were these sumptuous arks for? What did they tell us about the society that made them and the people that wanted them? Were they for ritual? Were they the objects of worship? Or were they something else? I hope, and I say this not only as an American, but also, frankly, as a dad. I think about the next generation and the world that we're creating for them. And I feel that we are at a point of some decision making. We're really at a reckoning point now. The history is blaring some alarms at us, and it's telling us that we have to make smart choices about ensuring that people at the bottom of our society are able to participate in the American dream. And that makes all the difference between whether we're able to come into a century that is as prosperous and innovative as the last one, or whether we're going to go down the path of some other societies that. That weren't able to make smart choices in time. I'm hopeful, but it is not something that happens on its own.
- [29:53]
A
Evan, this has been a fascinating conversation. Thank you so much.
- [29:57]
B
My pleasure. Great to be with you.
- [30:02]
A
You can find the Haves and have Yachts by Evan Osmos on Apple Books. We'll include a link to it on our Show Notes page. And every weekend, you can find new episodes of Apple News in conversation in the Apple News app. Just tap on the audio tab, that's the little headphones at the bottom to find.