A billion thoughts to ponder
June 02, 2010
There's absolutely nothing wrong with making money. There's nothing wrong with making a lot of money. But is there a line between being able to make a lot of money and being just plain greedy? And how much money is enough?
During 2007-08, the housing bubble began to crumble, the economy faltered, banks and other financial institutions were on the verge of failing, our 401k plans suddenly became less secure and many people, mostly working-class Americans, lost much of their retirement savings. Real estate, the most valuable thing most of us own, became worth less.
Then, George W. Bush began bailing out the banks with our (taxpayers') money, then moved out of the White House and we haven't seen him since. Barack Obama kept the trend going when others held out their hands with a sad look on their faces and he wrote them a check. And what did we get? A hard way to go and no money left to pay for the trip.
But, there were certainly big winners during the hard times, as there always are. Back during the Great Depression, there were still a lot of rich people, while most Americans struggled to find enough to eat. The Great Recession was not much different: a few with a lot and a lot with little.
Last month, the Business section of The New York Times focused on 10 of the top paycheck earners in the country, men who made so much money that their grandchildren's grandchildren won't be able to spend it all.
David Tepper, of Appaloosa Management, made $4 billion last year alone. George Soros, of Soros Fund Management, made $3.3 billion. James Simons, of Renaissance Technologies, made $2.5 billion. John Paulson, of Paulson and Co., the guy who bet that the housing market would fall off a cliff, made $2.3 billion because it did. Steve Cohen, of SAC Capital Advisors, made $1.4 billion. Carl Icahn, of Icahn Capital, made $1.3 billion. Edward Lampert, of ESL Investments, also made $1.3 billion. Kenneth Griffin, of Citadel Investment Group, made $900 million. John Arnold, of Centaurus Advisors, made $900 million, as well. But poor, little Philip Falcone, of Harbinger Capital, only took home $825 million. He'll probably be looking for a bailout at any moment, or else we'll see him in the food-stamp line.
Let's focus on just one of these guys. How about Paulson? The $2.3 billion breadwinner. We hear politicians talking about billions of dollars all the time these days, but it's still hard to imagine just how much money that is. I did a little homework on the issue and was shocked at how much $1 billion is.
A billion is 1,000 million.
If you counted to one billion — and counted 24 hours a day, seven days a week — it would take you 95 years to finish.
A billion minutes ago, the Roman Empire was in full swing.
A billion hours ago would take us back to the stone age.
A billion months ago, the dinosaurs were walking the earth.
If you deposited $1 a second into a bank account, it would take you 31 years, 259 days, 1 hour and four seconds to have a $1 billion balance.
Few of us ever get to see a $1,000 bill, which bears a picture of Grover Cleveland. But if you stacked crisp, new $1,000 bills on top of each other until you reached $1 billion, you'd have a stack that would reach 63 miles into the atmosphere. Most commercial jet planes only fly 7.7 miles high.
So, just think, Paulson made twice that amount and David Tepper made four times that amount, both in just one year.
In 2005, there were 793 billionaires around the globe and probably a lot more now. Millionaires are now a dime a dozen.
If you were making $50,000 a year (yeah, dream on), it would take 20,000 years for you to amass $1 billion. For those who are making $25,000 a year, it would take 40,000 years to make that amount. And these guys are doing it in one year. Isn't there something a little lopsided about that? Is anyone, or any talent or skill, worth that much money? And if these guys are making that much, don't you wonder how much their companies are making? And don't you wonder when the well will go dry? When will they have all of it?
Is there anything wrong with these guys making that much money? Probably not, at least maybe nothing illegal, but doesn't it seem absurd and extreme for someone without a product, someone whose only talent is handling other people's money, to make more money in a year than most of us make in 20,000 years?
And these people aren't creating jobs. They aren't putting that money back into circulation; they're hoarding it. And there have been several articles recently about how many large corporations are doing the same: sitting on billions and billions of dollars, not hiring, not spending, but just keeping the money out of circulation. And the extremely rich don't get their money from other rich people; they get it from us.
We hear the conservatives rant about how absurd it is for unions to demand that large corporations like the automakers pay their workers $25 an hour, that it's the unions that are bankrupting America. But, they are perfectly happy when people like David Tepper, who I'm sure doesn't know a hammer from a screwdriver, can make $1,923,076.92 an hour.
Isn't it strange what we value these days?