September 23, 2010; Source: Wall Street Journal |The Forbes list of the 400 richest Americans was released on Thursday, and the big news is the climbing wealth of Facebook co-founder Mark Zuckerberg whose wealth increased by 245 percent in 2009—passing Apple’s Steve Jobs and many other billionaires who actually make products like cars and computers (other Facebook billionaires making the top 400 included Eduardo Saverin and Peter Thiel.)
Zuckerberg is going to underscore his rich person credentials and donate $100 million for public schools in Newark, N.J. Facebook billionaires aside, we found something else interesting: 2009 was a horrendous year for American families, many of whom saw their wealth decrease, and for American households, which saw a downturn in their cumulative net worth by $1.5 trillion in the second quarter of 2010.
But Zuckerberg and his billionaire peers are doing just fine. The Huffington Post noted the irony of the cumulative wealth of these billionaires increasing 8 percent this past year while most Americans suffered through the prolonged recession. Yes, economists declared the recession “over” in mid 2009, but that’s a hard sell to the almost 10 percent of American workers who remain unemployed.
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Of course Bill Gates was still at the top, followed by Warren Buffett despite a very good year for the Omaha wizard in 2009 (Buffett partner Charlie Munger is at #236). For nonprofit readers, other names on the list warrant attention: Four of the top 10 on the list are Waltons with money from the Wal-Mart empire. The politically very conservative Koch brothers, Charles and David, tied for fifth on the list, each with fortunes of $21.5 billion (and brother William Koch comes in at #90). New York Mayor Michael Bloomberg may be among the richest public servants ever, with a fortune that gets him the tenth position on the list.
Well known philanthropists on the list include George Soros (#14), Paul Allen (the Microsoft partner, #17), Philip Anshutz (the conservative Colorado publisher whose foundation is a leading proponent of rural philanthropy, #34), Eli Broad (real estate investor from Los Angeles with a concern about education, #44), Pierre Omidyar (fortune from eBay, #47), Edward Johnson (#33) and Abigail Johnson (#22) (from Fidelity Investments), Charles Schwab (eponymous investor and philanthropist at #83), Gordon Moore (Californian supporting environmental causes, #88), and Stanley Druckenmiller (the hedge fund guy who wrote 9-figures worth of checks to the Harlem Childrens Zone, tied for 119th).
Nothwithstanding the Facebook, Microsoft, Oracle, and Apple wealth on the list, the number of top billionaires whose wealth comes from hedge funds is striking: George Soros (#14), John Paulson (#20), James Simons (#30), Steve Cohen (#32), Ray Dalio (#55), David Tepper (#62), Bruce Kovner and Stephen Schwarzman (tied for #69), Dirk, Robert, and Daniel Ziff (all tied for #74), Henry Kravis (#90), John Arnold (#95), Daniel Och (tied for #98), Paul Tudor Jones (#110), and many more. Since many of the hedge fund billionaires tie themselves to social entrepreneur nonprofits such as Teach for America, they may be inclined to be generous to others.
To be sure, in a terrible economic year that has extended to worsening conditions for many in 2010, America’s 400 richest billionaires aren’t hurting and could be tapped to give away a little bit more of their largesse.—Rick Cohen