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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.

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  • 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%.




      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.

  • 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.

    • 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.