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The ‘Self-Made’ Myth: Our Hallucinating Rich

In real life, working hard only takes you so far. Those who go all the way — to grand fortune — typically get a substantial head start. So documents a new analysis of the Forbes 400.

Let’s cut Mitt Romney some slack. Not every off-the-cuff comment the GOP White House hopeful made at that now infamous, secretly taped $50,000-a-plate fundraiser last May in Boca Raton reveals an utterly shocking personal failing. Take, for instance, Mitt’s remark that he has “inherited nothing.”

A variety of commentators have jumped on Romney for that line. They’ve pointed out that Mitt, the son of a wealthy corporate CEO, has enjoyed plenty of privilege, everything from an elite private school education to a rolodex full of rich family friends he could tap to start up his business career.

On top of all that, the young Mitt also enjoyed $1 million worth of stock his father threw his way to tide him over until big paydays started arriving.

Not quite “nothing.” But no reason to pick on Mitt either. Most really deep pockets, not just Mitt, consider themselves entirely “self-made.” The best evidence of this predilection to claim “self-made” status? The annual September release of the Forbes magazine list of America’s 400 richest.

Each and every year Forbes celebrates the billionaires who populate this list as paragons of entrepreneurial get-up-and-go. The latest top 400, Forbes pronounced last week, “instills confidence that the American dream is still very much alive.”

Of America’s current 400 richest, gushes Forbes, 70 percent “made their fortunes entirely from scratch.”

Forbes made the same observation last year, too, and most news outlets took that claim at face value. Researchers at United for a Fair Economy, a Boston-based group, did not. UFE analysts stepped back and took the time to investigate the actual backgrounds of last year’s Forbes 400. They released their findings last week, on the same day Forbes released its new 2012 top 400 list.

Most of our super rich were born on third base and think they hit a triple.

The basic conclusion from these findings: Forbes is spinning “a misleading tale of what it takes to become wealthy in America.” Most of the Forbes 400 have benefited from a level of privilege unknown to the vast majority of Americans.

In effect, as commentator Jim Hightower has aptly been noting for years, most of our super rich were born on third base and think they hit a triple.

In its just-released new report, United for a Fair Economy extends this baseball analogy to last year’s Forbes 400. UFE defines as “born in the batter’s box” those Forbes 400 rich who hail from poor to middle-class circumstances. Some had nothing growing up. Others had parents who ran small businesses.

About 95 percent of Americans, overall, currently live in these “batter’s box” situations. Just over a third, 35 percent, of the Forbes 400 come from these backgrounds.

Just over 3 percent of the Forbes 400, the United for a Fair Economy researchers found, have left no good paper trail on their actual economic backgrounds. Of the over 60 percent remaining, all grew up in substantial privilege.

Those “born on first base” — in upper-class families, with inheritances up to $1 million — make up 22 percent of the 400. On “second base,” households wealthy enough to run a business big enough to generate inheritances over $1 million, the new UFE study found another 11.5 percent.

On “third base,” with inherited wealth over $50 million, sit 7 percent of America’s 400 richest. Last but not least, the “born on home plate” crowd. These high-rollers, 21.25 percent of the total Forbes list, all inherited enough to “earn” their way into top 400 status.

The narrative of wealth and achievement that Forbes is pushing ignores the other side of the coin.

Last year, a rich American had to be worth at least $1.05 billion to make the Forbes 400. This year’s entry threshold: $1.1 billion, the highest ever.

Forbes, the United for a Fair Economy researchers sum up, has glamorized the myth of the “self-made man” and minimized “the many other factors that enable wealth,” most notably the tax breaks and other government policies that help the really rich get ever richer.

The narrative of wealth and achievement that Forbes is pushing, the new UFE study adds, “ignores the other side of the coin — namely, that the opportunity to build wealth is not equally or broadly shared in contemporary society.”

Sign up for To MuchAnd many of those who do have that opportunity — like the mega millionaires in Boca Raton who applauded so warmly when Mitt Romney asserted he had “inherited nothing” — see absolutely no reason to turn that coin over.

  • Pingback: The ‘Self-Made’ Myth: Our Hallucinating Rich | Inequality.org « garyzajac()

  • MDenny

    So 50+% of Billionaires coming from upper-middle class to poor families is a bad number? I personally think given all the talk, that is a surprisingly high number. I was born in the batter’s box and now well on my way to first base… maybe my kids will make it to second. I guess the real question is what was this number in the past, has it gotten worse or better.

    • stats

      it says “upper class”, not “upper middle class”. You’ve very casually changed the meaning. However, in fairness, the writer doesn’t give the bottom for upper class (inheritances up to $1 million). But it seems that the batter box (poor and middle class) represents 95%, and from that group, 35% of the Forbes 400 originate. You can’t add the 22% from the first basers, since they are from the remaining 5%.
      Stats!

      • Tanner Blumer

        Unfortunately, 95% of Americans can’t be currently living in the middle class or below…ya know… Stats!

        • Bongstar420

          Consequently, 95% of Americans cannot be in the top 5% bracket of anything.

      • johnybizzaro

        Yes but you seem to miss the point. When you inherit U$1 million in 1970, it ain’t chicken feed.

    • http://www.facebook.com/people/Patrick-Thompson/100000351264891 Patrick Thompson

      upward mobility has gotten worse over the past 4 decades.
      its harder to climb out of poverty.
      harder to go from middle to upper class.

      • Tanner Blumer

        Source? Call me crazy, but you aren’t a reputable researcher.

      • Bongstar420

        The establishment loves that.

    • Bongstar420

      You sure your not a narcissist? The odds are approximately 536/316,000,000 which translates to a success rate of 0.000169%. The average IQ of billionaires is around 115. The United States has 6,320,000 people with IQ’s +130.

  • I’M AWESOME

    I’M AWESOME

    • I’M AWESOME IS AWESOME

      I think you are awesome too!

  • ireneborshets

    Bill Gates, Mark Zukenberg and Sergey Brin come from the middle class families. they were not very poor, but they were not rolled in money. They made their own business and became billioneures by themselves. The same is many others. It’s not a fairy tale, it’s truth. In Israel there were many start up companies, which where bough for handread millions, and they were not rich. They were ordinary young people.How many actors or singers cam from poor families and became millioneurs? Many. Look on Oprah? She was dirt poor and became richest women in the world. or look on Marta Stewart. She was middle class women, who can coock and decorate and she used her talents and earn lot of money. And I can bet Woopy Goldber, who was dirt poor too, not poor anymore. And all this sportsmen, who came from poor families and became a stars? Some people do something to make their life better, some don’t. It’s not the reach people fault.

    • norsefox

      Your comment is utterly meaningless. You’ve stated that some rich people have low-income backgrounds. So? How does anecdotal evidence help here?

      Forbes is clearly pushing an agenda that isn’t at all supported by the evidence. Your point proves absolutely nothing and utterly fails to respond to anything mentioned in the article.

    • John Jeffire

      Bill Gates had very affluent parents who could send him to the best schools. Please fact check before making a dubious claim like this.

      • Bongstar420

        They were upper middle class with and had insider knowledge to begin with.

    • Johan

      Excellent, so that’s like 10 people already! And 10 out of hundreds of millions is more than enough to make the American dream a reality.
      And of course then there are the lottery winners who also prove that anyone can make it big in the West! Anyone with a dollar to spare and a little luck to go with it.
      Sure the odds are like a billion to 1, but hey – you really COULD make it.

      • Tanner Blumer

        But people who win the lottery go broke, get addicted to drugs, and die. People who make their own millions rarely self-destruct in such fabulous fashion.

        • Bongstar420

          What happened to Paris Hilton?

    • Bongstar420

      Yes…three people got lucky and consolidated the successes of others by leveraging the legal system

      Very commendable. LOL

  • James

    So if I turn a $500,000 into $1.1 billion (over a 2000% return) I am not a self-made man and my success in tainted?

    • billyvw

      No, the issue here is the idea that all have an equal chance at success. Clueless wealthy people like Romney pretend that success after being born on 3rd base is proof that anyone can make it, and, therefore, all who don’t are simply too lazy and deserve no sympathy. It makes it easier to justify cutting welfare when you think that luck of position at birth had nothing to do with your success.

      • James

        And my point is if it is so easy to turn 500k into 1.1 billion why can’t the average person turn 10k into 10 million?

        • billyvw

          A person that feels as free to risk 10k could potentially grow that money by taking risks, no doubt. However, your average person has no assets beyond a house and a 401k, if even that, which they would be leery of risking, due to a desire for guaranteed income in retirement. Having the freedom to risk money with no fear of falling into poverty is the easiest way to make money. It is a luxury most don’t have.

          • James

            Warren Buffett is notoriously risk adverse yet he has done pretty well for himself. I am not a fan of inherited wealth by any means but if the message that we tell people is that hard work isn’t what gets you ahead we are screwed as a country. If the message is to sit back and complain until you get yours then we are going nowhere. People came to this country with nothing to their name and busted their butts to make this country what it is. We forget far too fast.

          • Bongstar420

            I don’t think being a hedge fund manage is as hard of work as digging ditches during a Florida summer.

            But you see, hedge funds are valuable to the establishment playing king of the hill. There are few lackeys that are intelligent, talented, and subservient enough for those positions.

          • Bongstar420

            We live in a system where people profit for being owners. Duh

        • http://www.facebook.com/people/Patrick-Thompson/100000351264891 Patrick Thompson

          an average person would probably use 10k to actually survive.

          starting at $500k means you aren’t self-made, sorry.

          • Tanner Blumer

            What country are you living on 10k with? Not America!

          • Bongstar420

            I am doing it. Its called going without and accepting ever increasing financial penalties for falling behind.

            …and I am a pot grower producing some of the best around. I have $30k in debt for my college certificate and apparently $50k in debt for my business which a fair amount of that financial burden has been penalties from lack of proper funds to begin with…

            Yet, finding employment is literally a cake walk. There are numerous employers and investors that would be more than happy to exploit me for their profit.

          • Bongstar420

            LOL…$500k is 13 years of average income..and an average income takes up most of a person’s time in their life. Those that earn a living have little time to scheme a profit outside of that.

        • Michael Fournier

          Because the average person does not have 10K to invest they make less then 25K a year and the cost of housing food and clothing leaves them with more debt then savings. For those who earn less then the median income it is even worse. They do not even make enough to cover the costs of daily life. Most essentially have NO savings at all with what income they do make already ear marked to pay expenses before they even earn it. For most being able to put 10K away in savings is a dream. never mind making 10K into 100K. AND is they if they manage to make it from that situation they did it with help from someone even if is was basic family support so they can get a start, NO one exists in a vacuum no one ever accomplished anything alone. You can not achieve wealth in isolation, the very society you live in is the bases of any growth. If you achieve great success and wealth you also owe a great debt to that society for without it you can achieve nothing. To claim otherwise is arrogance.

          • Bongstar420

            You forgot to mention financial penalties for not having finances to pay for your finances.

            But you are correct. I am going to be forced to exploit labor and share my intellectual property with employees just to make a standard living…

        • Bongstar420

          If an average person could turn $10k to $10mil, then the folk with $500k would not have what they want in life. They would need more

      • Bongstar420

        Rich people want to buy the definition of superiority. It keeps the pu$$y in check

    • John Jeffire

      With 500 grand you can afford to take risks and even screw up and you’re still set to live comfortably. When you only have 10 grand and bills to pay, kids to feed, etc., you would be irresponsible to gamble. You suffer from the “I Am the World” view whereby if I did something then everybody else could. Not everyone has the same opportunities or starting line in life–the odds work progressively to your advantage if you are born a millionaire (like George W. Bush, Mitt Romney, etc.) and have the luxury of investing and gambling on the future.

      • James

        That’s just the thing. Who is saying it is a gamble? Only the person who doesn’t know what they are doing. I agree that with 10k and kids you are more risk adverse but there are plenty of ways to reduce risk. What is sad is that people look at Romney, Bush, etc. and take those as examples to sit back and complain as if they are victims rather than looking at the thousands and millions of examples where people took responsibility for their lives and did something about it. But personal responsibility has long been absent in our society and that is a great tragedy.

        • Bongstar420

          Retarded…being perfect does not come close to guaranteeing success.

    • Mason Colbert

      Who are you? What’s your full name? Where are your assets located? I would like to verify your $500,000 to $1.1 billion claim. I know what you mean though. I took just 30 bucks and in 7 years turned it into over $38.5 billion! I win!

      • Bongstar420

        I have a virtual stock portfolio…it has mad +$50k off of $250k in 1 year. It was $100k, but I got stuck in a few trades I wasn’t intending to be in due to game errors. For instance, in the game, trades can take anywhere from 5 minutes to 1.5 days to complete. To actually make money, you need every trade to behave identical.

        I am currently ranked 466/30,000 as an “investor”

        Anyways, I don’t know anything about investing at all.

    • Bongstar420

      It depends. Did you tell other people to produce the profits for you or did you do all of the work yourself?

      I don’t believe its physically possible to actually earn $1,000,000,000 when the average income is around $30,000

  • http://www.youtube.com/watch?v=3qxUYpaVNZM wal_man

    I know this is old so nobody has to bother to point it out but it seems a more realistic and equitable breakdown of the Forbes list. Still, the highest percentage on the list, 35%, are home platers. That is over 1/3 of the list. Those are pretty good odds to go from middle-class to the top 400. Add to that the self-mades that only reached the modest “Millions” and I’ll bet it’ll be over half. It underscores that “the poor” don’t always stay poor. Unless, of course, you take the government welfare. Then you stay poor.

    • http://www.facebook.com/people/Patrick-Thompson/100000351264891 Patrick Thompson

      pretty good odds, lol. you suck at math.
      300 million people start “in the batters box”, and about 140 made it to the top 400.
      0.00000075% chance, or one out of every 2.14 million people.

      • http://www.youtube.com/watch?v=3qxUYpaVNZM wal_man

        This was two months ago. Where you been?

        • Bongstar420

          Earning a living rather than sitting in a office expecting others to do it for them.

      • Tanner Blumer

        Patrick, 300 Million people don’t start in the batters box. The top 10% of net-worth in this country have over $2 million…

      • Bongstar420

        He is probably rich and didn’t have his accountant around

    • Bongstar420

      Pretty good odds…lol

  • Jack Bell

    The only thing worse than the fact that someone born middle class or lower has a better chance of hitting the lottery than becoming rich without inherited investments or business connections, private school, connected parents, etc. Is the fact that there are middle class people out there suffering the same plight yet they STILL defend the super rich by claiming they were actually self made! It baffles me. Inferiority complex I’d bet. If everyone had the same odds then how do you explain areas like Detroit, Newark, etc? Parental involvement matters alot too and people without that are also at aa major disadvantage.
    Side note government welfare DOES reward bad behavior and keep the poor poor.. But that’s not the topic of discussion here. Just saying that not everyone who believes the rich generally ARE NOT SELF MADE support things like welfare.

    • Bongstar420

      Brainwashing.

  • Bongstar420

    Rich people are better…they paid for that distinction already

  • Theresa Gricius Rosen

    Mitt Romney also only paid 13% on income tax.. like the rest of the rich…because most of their money is made from capital gains which is not taxed like our weekly/biweekly/monthly incomes, which is something like 35%. These rich hide their money in tax havens around the world, they have stolen our homes, our bank accounts, our pensions, our contractual employee health care. Think of CEOs that make millions….that money is tax deductible for the employer!!!! And if anyone has seen The Big Short you will learn how these greedy people were in bed with almost every politician. And remember, when these rich people give to charity, that’s deductible.The rich do not go to jail unless they steal from someone as rich as them. Our jails are filled with innocent people who didn’t have the money for a private attorney. Companies walk all over us. The only way to end this inequality is to kick everyone out of the government and start over. And quit buying their products and using their services. Go local….no multinationals that have no patriotism except to the almighty dollar…and who never go to any of the wars.

  • magpie58@juno.com

    Nowhere in this article does it say that he gave his inheritance away and that he has given many millions to charity. Of course it doesn’t because that is the truth.

  • Matthew Bedford

    Democracy is a pyramid , and indeed shit does flow down , which is usefull to those at the top which are full of shit , at least they dont have to smell it.

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