Appraising the Whims of Billionaires

America has become the land of billionaire philanthropy.  But Jeff Bezos, the founder, chairman and chief executive officer of Amazon, the world’s largest online shopping retailer apparently intends to pursue a different approach in allocating his wealth. 

Some people viewed Bezos’ decision to buy the Washington Post, in 2013 as an act of philanthropy, but a newspaper is not a nonprofit, at least not deliberately.  If not a flood of new dollars, his ownership of the Post has earned Bezos substantial attention from Mr. Trump.

Perhaps of greater interest, and potential investment, is Bezos’ fascination with “space travel.” 

In 2000 he created Blue Origin, a company that builds reusable rockets and is developing a new orbital launch vehicle with the intention of sending tourists into space and eventually heavy industry along with millions of workers.  In 2016, he began a plan to invest $1 billion a year in this endeavor.

Surely there are whims with more likely value to the American public than space travel towards which Bezos could direct his largesse.  With a fortune estimated at $132 billion, the Princeton graduate and tech entrepreneur could almost fund South Carolina’s state budget with his annual interest alone.  That might be appropriate since Bezos has acquired his billions in large part by refusing to collect state and local sales taxes thereby slashing state and local government revenue while undercutting traditional brick and mortar businesses.

A more realistic and immediate alternative could be to start paying all Amazon workers a living wage---a minimum of $15 an hour.  According to the latest annual report of the internet behemoth, the median pay for Amazon employees is $28,446, which means that half of all workers make less than $14 an hour.  For comparison, Target Corp. has announced plans to pay at least $15 an hour to all employees by the end of 2020.

Bezos could also improve the general climate for economic development in the United States by dampening down the frenzy engendered by Amazon’s competitive search for a second headquarters.   Not every city was as wild as Newark which offered Amazon $5 billion to come to New Jersey ($100,000 for each employee), but all have been too willing to mortgage their community’s future for the prize. 

Amazon's HQ2 competition is part of a deeply disturbing trend in today’s America.  State against state, city against city, a wasteful and economically unproductive bidding civil war is undermining the nation’s infrastructure.  Revenue is being spent, or foregone, to provide tax and other incentives to footloose enterprises instead of going to investments in schools, housing, transportation and healthcare access.  This is happening in a country that is supposedly a single economic unit; at least that was the intent of the US Constitution when adopted.

As one of the world's most valuable companies, Amazon could set an example by declining tax and other costly incentives.  Instead, it could judge sites on the basis of their infrastructure plans for the future.  Other major corporations might follow Amazon’s lead.

  

Billionaire philanthropy has been a mixed bag generally.  Sometimes it works out alright---the HIV campaign of the Gates Foundation in Africa; Gates meddling in education has not been so great when it has joined in the scapegoating of teachers in America. 

Then there is Stephen Schwarzman who famously compared the Obama administration’s plan to raise the tax rate on carried interest to Hitler’s invasion of Poland.  He later apologized.  In 2015 Schwarzman gave his alma mater Yale $150 million for a “cultural center.”  Yale has an endowment of over $27 billion.

And of course we have the Koch brothers.  The American Legislative Exchange Council (ALEC) and Americans for Prosperity, a 501©(4) “social welfare” organization, are two of their pet projects.  ALEC, touted as a “public-private partnership,” has promoted to state governments a multiplicity of model bills with conservative agendas including “stand your ground” and voter ID laws.  A tax exempt advocacy group, Americans for Prosperity is free to spend unlimited money “educating” the public about issues---as long as these efforts are not coordinated with any candidate’s campaign.  There are a plethora of such groups bankrolled by big money donors seeking to influence legislation and regulations to enhance business interests to the detriment of consumer and worker protections.

Admittedly, the political leadership of this country in recent years has not been much better at investing in productive ideas, but part of the problem there is the lobbying avalanche funded by alleged “philanthropists”

Recent tax legislation did nothing to remedy this situation.  Bumping the top marginal tax rate to 80 percent might give governments at all levels something to work with---and it might even inspire the wealthy to go ahead and share their largesse with their employees and their community more generously.  Not a bad idea since both have a lot to do with generating that wealth.