Seattle billionaires have too much influence. Even the nice ones | KUOW News and Information

Seattle billionaires have too much influence. Even the nice ones

Apr 26, 2017

Seattle's billionaires are changing the world. Sometimes for the better, but sometimes it's a threat to democracy. 

“Bill Gates has raised a lot of alarms,” said author David Callahan said. “Bill and Melinda Gates helped orchestrate this movement to the Common Core across the entire nation.”

Callahan continued: “I don’t want to suggest that Bill Gates is evil at all. I think he has the best of intentions, but I think that it’s pretty alarming stuff seen from a certain vantage point.” 

Callahan is founder and editor of Inside Philanthropy, a digital media site. His new book is "The Givers: Money, Power and Philanthropy in a New Gilded Age."

Callahan: We are now seeing some of the biggest fortunes ever created in America harnessed to philanthropies and converted into power. And this is happening at a time that government is becoming weaker and has fewer resources to do its job. Philanthropists are stepping forward as the public sector steps back and we're seeing a real power shift in terms of who has the resources to get things done and how big is it.

KUOW: And how big is the change?

Callahan: It's big. There's about 30,000 new foundations — private foundations — that have been created in the last 15 years. Bill Gates used to be kind of alone among these new megadonors, but there's more and more of them every time you turn around.

Steve Ballmer, another familiar name in Seattle, is just starting his philanthropy in a big way. He's one of the richest people in the world.

There's a lot of these mega-billionaires who are going to start wielding more and more influence over different parts of society in ways both good and bad. But ultimately it does raise questions as to who has power in our society.

KUOW: And there are quite a few of these billionaire donors in the Seattle area. Who has made the world a better place, according to your metrics?

Callahan: I certainly would say that Bill Gates has made the world a better place with his public health philanthropy in poor countries. That to me is a great example of a philanthropist going after what I call the low hanging fruit, vaccinations, that can really make a huge difference.

KUOW: So why is that kind of philanthropy good, according to your metrics?

Callahan: It's good because these philanthropists are going after solvable problems in a way that doesn't "bigfoot" over other citizens. You know it's not like the education philanthropy, which is a lot more controversial because that's a democratic institution we care about.

KUOW: Well, let me ask about that. Bill Gates has also been a donor to education philanthropies.  How's that worked out?

Callahan: It's not worked out so well. It's been really a mixed bag, as he himself has acknowledged, because K-12 is a tough problem to solve. It’s a $600 billion system with 10,000 different school districts. That’s what I would call the high hanging fruit when it comes to philanthropy. And those efforts have been very controversial. People don't like billionaires swooping into their school district to make plans for how their children are educated.

KUOW: So is billionaire philanthropy an example of political activism?

Callahan: Some of it is, for sure. Michael Bloomberg has been a leader in trying to shut down coal-fired power plants, giving $130 million to the Sierra Club. The biggest donor in the history of the Sierra Club is Michael Bloomberg.

KUOW: And there's a lot of talk these days about the resistance to President Donald Trump. There's a lot of things happening here in Washington state. What role are billionaires playing in "the resistance"?

Callahan: Well every time you have a president with a big ambitious agenda it produces a counter-mobilization among wealthy donors. Obama was fought by billionaires like the Koch brothers, and with Donald Trump we're seeing billionaires like Pierre Omidyar, Tom Steyer, Michael Bloomberg and George Soros who are stepping up to combat that Trump agenda. And lots of money is flowing to activist organizations from deep-pocketed donors right now.

KUOW: So what's wrong with billionaires being activists and getting involved with things that are a little bit political, like education reform?

Callahan: Many citizens already feel like their voice doesn't count. They feel that the wealthy have too much power in society. We live in an age of tremendous economic inequality, and there's lots of signs that that's translating into political inequality because the wealthy have so many more resources to affect public policy and public life.

In a democracy the ideal is that all of us can be heard equally. And we're far from that ideal. We've heard a lot about all the money and go in for political campaign contributions. I suggest that this philanthropic money is another form of money in politics or can be when it's used for activist causes.

What I would like to see is an America where everybody does have an equal voice in our democracy. But we're headed in the opposite direction, with billionaires able to put their thumb on the scale of these issues and really move the agenda.

KUOW: Why is this happening?

Callahan: For the past three decades, we've seen a huge accumulation of wealth at the very top of the income ladder. The Forbes 400 have a combined net worth of $2.5 trillion. Many of those people have signed the Giving Pledge, which was developed by Warren Buffett and Bill Gates to induce more giving by billionaires. And a lot of that money is going to be hitting the charitable and nonprofit sector. So this is really the next chapter in the historic inequality we've seen in the second gilded age.

KUOW:  What's the worst-case scenario if this second gilded age continues on the same train that it's been on kind of moving forward?

Callahan: Well, one scenario is that you know the wealthy end up basically controlling civil society and also taking over many of the functions that government does. All this new philanthropy is happening at a time the government is facing historic constraints on its resources.

Government budget cuts are hitting at the federal state and local level. That was true even before Donald Trump became elected and it's going to be more true going forward. And that means government has fewer resources to do things and solve problems.

Private philanthropy has more resources. So we're seeing a power shift away from government, which is accountable to all citizens, to these kind of super citizen donors who are accountable to nobody.

KUOW: But if conservative activists like Grover Norquist is hearing this, he's going, "This all sounds great." What's wrong with that?

Callahan: Well it may sound great to Grover Norquist, but it doesn't sound great to me. My concern is that we're heading into a kind of privatized future with a benign plutocracy. I think many of these donors have the best of intentions. They want to give back. They want to do something positive in the world. But they're not the people who should be in the driver's seat of American life.

KUOW: You’re painting a picture here that reminds me of Spider-Man. There are these billionaires.  They fund causes and scientific research. But instead of being forces for good, sometimes they’re forces for evil. How close is that to the picture that you’re painting in this book?

Callahan: It depends what your politics are, but some of these donors can look pretty scary.

Donald Trump: One of the top donors to him has been the Mercer family - Robert and Rebecca Mercer - who have orchestrated this whole infrastructure of conservative think tanks that have engaged in relentless attack. They helped destroy Hillary Clinton through attacks on her foundation and through attacks around her use of a private e-mail server. Philanthropy has really been weaponized in a powerful way.

KUOW: So how would you rate our biggest local donor in the Seattle area, with one being truly good and 10 being truly evil on the Spider-Man villain scale. Where do you put Bill Gates?

Callahan: Bill Gates has raised a lot of alarms. Bill and Melinda Gates helped orchestrate this movement to the Common Core across the entire nation.

Since when did private philanthropies get to decide or get to play that kind of role in public education? This is very alarming, whether you like the Common Core or not. It raises questions as to who is really in charge of our education system.

KUOW: So, six? Pretty evil?

David Callahan: I don't want to suggest Bill Gates is evil at all. I think he has the best of intentions, but I think that it's pretty alarming stuff seen from a certain vantage point.

KUOW: What's the best-case scenario - the way in which that horrific Spider-Man apocalyptic future doesn't come to pass?

David Callahan: The best-case scenario is that we find a way to avoid that downward trajectory of government, where government is not on its back with the super-citizen donors running the show.

Instead, we manage to strengthen government and maintain it as a strong agent for change and for solving problems. And that philanthropy remains what it was during the 20th century, which is the junior partner of government - the lesser power in society - that helps incubate ideas and makes government better. And not the force that ends up really running the show, which is where I think we may be headed.