’’ …we had come to the stage where for our people what was needed was a real democracy; and of all forms of tyranny the least attractive and the most vulgar is the tyranny of mere wealth, the tyranny of a plutocracy.’’
Those are the words of Theodore Roosevelt, a Republican, who dedicated his years as president to eliminating the plutocratic society that had existed in the United States since it’s inception. His actions, and the actions of those that followed in his footsteps, led to a the rise of the American Middle class. In recent years, pendulum started to swing back in the favor of the super wealthy.
It is in this context that I find the tech billionaires that are making headlines recently for their spending sprees particularly interesting. For those of you who don’t know, I’m referring to the gigantic expenditures made by Facebook CEO Mark Zuckerberg and former Microsoft CEO Steve Ballmer.
Lets first look at Mr. Zuckerberg. His story should be pretty familiar by now. As a Harvard student, he started Facebook. He left school to pursue his dream and is now worth $26.3 billion. If you believe that any element of David Fincher’s The Social Network is true, Zuckerberg was kind of an asshole.
If his recent charitable contributions suggest anything, Zuckerberg may have had a change of heart. Last week, he and his wife announced that they were donating $120 million for public schools in the Bay Area. This gift, part of $1.1 billion pledge to the nonprofit Silicon Valley Community Foundation, is a continuation of Zuckerberg’s commitment to improving education in America.
Inspired by the Gates Foundation, Zuckerberg previously donated $100 to the Newark, New Jersey public school system. Apparently the distribution of this gift has angered many in Newark, but it is hard to say that Zuckerberg didn’t mean well.
He’s also not afraid to get his hands dirty to help children. Believing that he needed hands on experience to really help improve the educational system, Zuckerberg donated his time to run an after-school program teaching entrepreneurship. Again, at least on the surface, it appears his heart is in the right place.
On the other hand, let’s looks at Ballmer. After attending Harvard with Bill Gates, Ballmer joined Microsoft as the company’s 30th employee. Eventually, he became the second person to become a billionaire based on stock options received from a company in which he was neither a founder or relative of a founder. That isn’t to say he didn’t earn his money, but he is by no means a self made man.
Since 2008, Ballmer has been hell bent on buying a basketball team. He first attempted to buy the Seattle Sonics to keep the team in Seattle. This attempt failed. In 2013, Ballmer, along with Chris Hansen, attempted to buy the Sacramento Kings for $650 million. Their goal was to move the Kings to Seattle. This attempt also failed.
Then shit hit the fan. On April 25, 2014 a recording surfaced of a conversation between LA Clippers owner Donald Sterling and his mistress. Essentially, the tape revealed that a longtime, documented racist was, indeed, still racist. I’m really not sure why this surprised anyone, but it did. The NBA acted quickly, banning Sterling for life and taking the initial steps toward forcing the sale of the team.
This set off a feeding frenzy in which all of the super wealthy people expressed their interest in buying the team. Ballmer quickly emerged as the loudest voice, offering the Sterlings $2 billion dollars for the team.
This bid is a little bit insane. Sterling bought the team for $12.5 million dollars. He and his wife will earn $1.987 billion dollars the because it was publicly revealed that he is a terrible person. We are heaping massive financial rewards on someone who is supposed to be getting punished. Second, Forbes reported the value of the Clippers to be around $.5 billion dollars just six months ago. So, not only are we rewarding an asshole for being an asshole, we are paying him far more than his product should be worth.
The primary reason this team may sell for $2 billion is due to the context under which the team is being sold. It's a part of the sensationalist news cycle. The secondary reason is that Steve Ballmer has a maniacal need to own a basketball team.
We have been told economic policy that supports the rich benefits everyone because they know the best way to invest their money to create jobs. That "[their] own personal self-interest is in the interests of everybody else." Paying $2 billion to buy a basketball team is not in the best interest of society as a whole. It only serves one need, feeding Steve Ballmer’s ego. It is highly unlikely that this $2 billion investment will create many... or any.. new jobs. You could argue that it may be a good thing for Seattle, when he inevitably moves the team there. It won’t create new jobs, but it might relocate them. Otherwise, no. This is not in the best interest of anyone other than Ballmer and the Sterlings
So, we just had too notable billionaires spend massive amounts of money in the support of a cause. One cause was altruistic attempt at improving life for many children. The other was cause that serves only to fulfill the ego of a one man and make a racist asshole even more wealthy than he already is. I find this comparison interesting. Which do you think is the more appropriate way for the wealthiest members of society to behave? Do the ultra-rich owe anything to the society that created them? Or not?
It seems in another amazing turn of events Donald Sterling has decided he no longer wants to sell the team. Instead, he is suing the NBA for $1 billion to prevent the sale that was negotiated by his wife. Interestingly, her agreement with the NBA states that the Sterling Family Trust will indemnify the NBA against all lawsuits regarding the sale of the Clippers, including those by her husband. So, Donald Sterling is officially suing himself for $1 Billion.