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Commentary: Does America need billionaires? Billionaires say 'Yes!'
What’s the most downtrodden and persecuted minority in America?
If you said it’s transgender youths, immigrant workers or women trying to access their reproductive health rights, you’re on the wrong track.
The correct answer, judging from a surge in news reporting over the last couple of weeks, is the American billionaire.
I don’t think that we should have billionaires because, frankly, it is so much money in a moment of so much inequality, and ultimately, what we need more of is equality across our city and across our state and across our country.
— Zohran Mamdani, candidate for NYC mayor
Concern about the welfare of this beleaguered minority (there are about 2,000 billionaires in the U.S.) has been triggered — or re-triggered — by the victory of Zohran Mamdani in New York City’s June 24 Democratic primary.
A self-described “democratic socialist,” Mamdani has had to weather bizarrely focused questions from cable news anchors and others about comments he has made about extreme wealth inequality in the U.S., and specifically in New York.
“I don’t think that we should have billionaires,” he told Kristen Welker of NBC’s “Meet the Press” on June 29.
Welker had asked Mamdani, “Do you think that billionaires have a right to exist?” This was a weirdly tendentious way of putting the question. She made it sound as though he advocated lining billionaires up against a wall and shooting them. In fact, what he has said is that the proliferation of billionaires in America, and the unrelenting growth in their fortunes over the last decades, signified a broken economic system.
Nevertheless, the billionaire class and their advocates in the media and on cable news expressed shock and dismay at the very idea. “It takes people who are wealthy in New York to maintain the museums, maintain the hospitals,” John Catsimatidis, a billionaire real estate and supermarket tycoon, fulminated on Fox News. “Do you know how much money we put up to contribute toward museums and hospitals and everything?”
Catsimatidis may not have realized that he had proved Mamdani’s case: In New York and around the country, a tax structure that indulges the 1% with tax breaks has forced austerity on museums and hospitals and services that should be publicly supported. They’re public goods, and they shouldn’t be dependent on the kindness of random plutocrats.
The sheer scale of billionaire wealth in the U.S. prevents most people from understanding how historically outsized it is. “To own $1 billion is to possess more dollars than you’ll ever count,” observed Timothy Noah of the New Republic in a must-read takedown of the American oligarchy published last month. “It’s to possess more dollars than any human being will ever count. And that’s just one billion. Forbes counts 15 Americans who possess hundreds of billions.”
The most comprehensive defense of billionaires appeared July 1 in the Financial Times. It was written by Michael Strain, director of economic policy studies at the American Enterprise Institute, a pro-business think tank that has advocated against increasing the minimum wage (in a article by Strain), against the Dodd-Frank post-Great Recession banking reforms, against environmental legislation and against tobacco regulations, among other bete noires of the right.
“We should want more billionaires, not fewer,” Strain writes. “While amassing their fortunes, billionaires make the rest of us richer, not poorer.”
Exhibit A on Strain’s docket is Jeff Bezos, the Amazon.com magnate whose recent wedding in Venice is estimated to have cost as much as $25 million, tasteful and unassuming as we all know it to have been.
Strain cites the common estimate of Bezos’ personal fortune at about $240 billion. He then applies a calculation developed by Nobel economics laureate William D. Nordhaus in 2004, that only 2.2% of the social value of innovations is captured by the original innovators. If Bezos’ $240 billion is 2.2% of the social value of Amazon’s revolution in retailing, then Bezos must have created $11 trillion in wealth for the rest of us.
“Not a bad deal,” Strain writes.
Strain’s interpretation of Nordhaus is hopelessly half-baked. First, Nordhaus was talking about the gains captured by corporations, not individual entrepreneurs. Also, his estimate arose from abstruse economic formulas and lots of magic asterisks.
Nordhaus didn’t present his findings as a defense of any particular economic policies — the 2.2%, he wrote, was excess or “Schumpeterian” profits, those exceeding what would be expected from the normal return from invested capital, which implies that they’re somewhat illegitimate.
Further, it makes no sense to start with an individual entrepreneur’s wealth and extrapolate it to the social value of his or her innovation. It would be more appropriate to try to estimate the social value of the innovation, and then ask whether the innovator’s profits are too much, not enough, or just right.
I asked Strain to justify his treatment, but didn’t hear back.
Another issue with Strain’s advocacy is that he depicted every innovation as the product of a single person’s efforts. Elsewhere in his op-ed, he wrote that Bill Gates and Michael Dell “have made hundreds of millions of workers more productive by creating better software and computers, driving up their wages.”
He also cited Google founders Larry Page and Sergey Brin, who “revolutionized email, internet search and mapping technology”; he added that “many of us would eagerly shell out money every month for these services, if they weren’t provided by Google free of charge.”
(Is that so? If Google thought that consumers would eagerly pay for its services, you can be sure the company would find a way to charge for them, instead of making its money from advertising and sponsorship deals.)
This isn’t the first time that billionaires have felt abused by the zeitgeist. Back in 2021, I wrote that America plainly leads the world in its production of whining billionaires. My example then was Leon Cooperman, a former hedge fund operator who appeared on Bloomberg to grouse about proposals for a wealth tax. He called them “all baloney,” though a viewing of the broadcast suggested he was about to use another label beginning with “B” and caught himself just in time.
A few years earlier, in a ghastly letter published in the Wall Street Journal, Silicon Valley venture investor Thomas Perkins compared the suffering he and his colleagues in the plutocracy had experienced due to public criticism to that of Jews facing Nazi pogroms. “I would call attention to the parallels of fascist Nazi Germany to its war on its ‘one percent,’ namely its Jews, to the progressive war on the American one percent, namely the ‘rich,’” Perkins wrote.
The truth, of course, is that while rich entrepreneurs love to pose as one-man bands, every one of them acquired their wealth with the help and labor of thousands of others. Many of the rank-and-file workers without whom Bezos, Dell and their fellow plutocrats could have reached their pinnacles of fortune have struggled in the oligarchic economy, relying on public assistance to make ends meet.
Bill Gates didn’t originally create “better software” — Microsoft’s original product was a computer operating system he sold to IBM, but which was developed by someone else, Gary Kildall. As of last year, Microsoft employed more than 220,000 people. Dell’s original innovation wasn’t a better PC, but a system of selling clones of IBM PCs by mail order.
It’s proper to question whether any of these innovations have been unalloyed social boons. Amazon may have revolutionized retail, but at the cost of driving untold mom-and-pop stores, and even some big chains, out of business, and paying its frontline workers less than they’re worth.
As for its benefits for consumers, in a lawsuit filed in 2022, California accused Amazon of hobbling retail market competition by having “coerced and induced its third-party sellers and wholesale suppliers to enter into anticompetitive agreements on price.”
The state said that “Amazon makes consumers think they are getting the lowest prices possible, when in fact, they cannot get the low prices that would prevail in a freely competitive market.” (Emphasis in the original.)
Amazon says the state’s claims are “entirely false and misguided,” and denies the state’s assertion that its agreements with vendors and suppliers are designed to “prevent competition” or “harm consumers.” The case is scheduled to go to trial in San Francisco state court in October 2026.
That brings us back to Mamdani. In questioning whether billionaires should exist in the U.S., he was implicitly repeating an observation favored by Sen. Bernie Sanders (I-Vt.) and Rep. Alexandria Ocasio-Cortez (D-N.Y.): “Every billionaire is a policy failure,” a phrase generally attributed to AOC adviser Dan Riffle.
Riffle’s point is that the accumulation of such wealth reflects policies that exacerbate economic inequality such as tax breaks steered toward the richest of the rich, leading to the impoverishment of public services and programs. That trend has been turbocharged by the budget bill President Trump signed on July 4, which slashes government programs to preserve tax cuts for corporations and the wealthy enacted in 2017 by a Republican Congress and signed by Trump.
Mamdani adeptly underscored that point during his appearance on “Meet the Press.” “I don’t think that we should have billionaires,” he told Welker, “because, frankly, it is so much money in a moment of so much inequality, and ultimately, what we need more of is equality across our city and across our state and across our country.”
His prescription is to raise the state corporation tax by several percentage points to match that in neighboring New Jersey, and to add a 2-percentage-point city surcharge on incomes over $1 million, and use the revenue to finance free bus service, free child care and other public services.
The focus by cable news and other media organizations on the idea that Mamdani would erode New York’s economic base by driving the ultra-rich out of the city was as dubious as it was sadly predictable. Some of them have been feeding on spoon-fed pap by the rich and powerful for so long that — as A.J. Liebling once put it — they need to relearn how to chew. Then Mamdani would get a fair shake, and so would the rest of us.
The sale of Warner Bros. — whether in pieces to Netflix or in its entirety to Paramount — is stirring mounting worries among Hollywood union leaders about the possible fallout for their members.
Unions representing writers, directors, actors and crew workers have voiced growing concerns that further consolidation in the media industry will reduce competition, potentially causing studios to pay less for content, and make it more difficult for people to find work.
“We’ve seen this movie before, and we know how it ends,” said Michele Mulroney, president of the Writers Guild of America West. “There are lots of promises made that one plus one is going to equal three. But it’s very hard to envision how two behemoths, for example, Warner Bros. and Netflix … can keep up the level of output they currently have.”
Last week, Netflix announced it agreed to buy Warner Bros. Discovery’s film and TV studio, Burbank lot, HBO and HBO Max for $27.75 a share, or $72 billion. It also agreed to take on more than $10 billion of Warner Bros.’ debt. But Paramount, whose previous offers were rebuffed by Warner Bros., has appealed directly to shareholders with an alternative bid to buy all of the company for about $78 billion.
Paramount said it will have more than $6 billion in cuts over three years, while also saying the combined companies will release at least 30 movies a year. Netflix said it expects its deal will have $2 billion to $3 billion in cost cuts.
Those cuts are expected to trigger thousands of layoffs across Hollywood, which has already been squeezed by the flight of production overseas and a contraction in the once booming TV business.
Mulroney said that employment for WGA writers in episodic television is down as much as 40% when comparing the 2023-2024 writing season to 2022-2023.
Executives from both companies have said their deals would benefit creative talent and consumers.
But Hollywood union leaders are skeptical.
“We can hear the generalizations all day long, but it doesn’t really mean anything unless it’s on paper, and we just don’t know if these companies are even prepared to make promises in writing,” said Lindsay Dougherty, Teamsters at-large vice president and principal officer for Local 399, which represents drivers, location managers and casting directors.
Dougherty said the Teamsters have been engaged with both Netflix and Paramount, seeking commitments to keep filming in Los Angeles.
“We have a lot of members that are struggling to find work, or haven’t really worked in the last year or so,” Dougherty said.
Mulroney said her union has concerns about both bids, either by Netflix or Paramount.
“We don’t think the merger is inevitable,” Mulroney said. “We think there’s an opportunity to push back here.”
If Netflix were to buy Warner Bros.’ TV and film businesses, Mulroney said that could further undermine the theatrical business.
“It’s hard to imagine them fully embracing theatrical exhibition,” Mulroney said. “The exhibition business has been struggling to get back on its feet ever since the pandemic, so a move like this could really be existential.”
But the Writers Guild also has issues with Paramount’s bid, Mulroney said, noting that it would put Paramount-owned CBS News and CNN under the same parent company.
“We have censorship concerns,” Mulroney said. “We saw issues around [Stephen] Colbert and [Jimmy] Kimmel. We’re concerned about what the news would look like under single ownership here.”
That question was made more salient this week after President Trump, who has for years harshly criticized CNN’s hosts and news coverage, said he believes CNN should be sold.
The worries come as some unions’ major studio contracts, including the DGA, WGA and performers guild SAG-AFTRA, are set to expire next year. Two years ago, writers and actors went on a prolonged strike to push for more AI protections and better wages and benefits.
The Directors Guild of America and performers union SAG-AFTRA have voiced similar objections to the pending media consolidation.
“A deal that is in the interest of SAG-AFTRA members and all other workers in the entertainment industry must result in more creation and more production, not less,” the union said.
SAG-AFTRA National Executive Director Duncan Crabtree-Ireland said the union has been in discussions with both Paramount and Netflix.
“It is as yet unclear what path forward is going to best protect the legacy that Warner Brothers presents, and that’s something that we’re very actively investigating right now,” he said.
It’s not clear, however, how much influence the unions will have in the outcome.
“They just don’t have a seat at the ultimate decision making table,” said David Smith, a professor of economics at the Pepperdine Graziadio Business School. “I expect their primary involvement could be through creating more awareness of potential challenges with a merger and potentially more regulatory scrutiny … I think that’s what they’re attempting to do.”
Businessman Brian Kahn has pleaded guilty to conspiracy to commit securities fraud in a case that brought down a hedge fund, helped lead to the bankruptcy of a retailer and damaged West Los Angeles investment bank B. Riley Financial.
Kahn, 52, admitted in a Trenton, N.J., federal court Wednesday to hiding trading losses that brought down Prophecy Asset Management in 2020. The Securities and Exchange Commission alleged the losses exceeded $400 million.
An investor lawsuit has accused Kahn of funneling some of the fund’s money to Franchise Group, a Delaware retail holding company assembled by the investor that owned Vitamin Shoppe, Pet Supplies Plus and other chains.
B. Riley provided $600 million through debt it raised to finance a $2.8-billion management buyout led by Kahn in 2023. It also took a 31% stake in the company and lent Kahn’s investment fund $201 million, largely secured with shares of Franchise Group.
Kahn had done deals with B. Riley co-founder Bryant Riley before partnering with the L.A. businessman on Franchise Group.
However, the buyout didn’t work out amid fallout from the hedge fund scandal and slowing sales at the retailers. Franchise Group filed for bankruptcy in November 2024. A slimmed-down version of the company emerged from Chapter 11 in June.
B. Riley has disclosed in regulatory filings that the firm and Riley have received SEC subpoenas regarding its dealings with Kahn, Franchise group and other matters.
Riley, 58, the firm’s chairman and co-chief executive, has denied knowledge of wrongdoing, and an outside law firm reached the same conclusion.
The failed deal led to huge losses at the financial services firm that pummeled B. Riley’s stock, which had approached $90 in 2021. Shares were trading Friday at $3.98.
The company has marked down its Franchise Group investment, and has spent the last year or so paring debt through refinancing, selling off parts of its business and other steps, including closing offices.
The company announced last month it is changing its name to BRC Group Holdings in January. It did not immediately respond to requests for comment.
At Wednesday’s plea hearing, Assistant U.S. Atty. Kelly Lyons said that Kahn conspired to “defraud dozens of investors who had invested approximately $360 million” through “lies, deception, misleading statements and material omissions.”
U.S. District Judge Michael Shipp released Kahn on a $100,000 bond and set an April 2 sentencing date. He faces up to five years in prison. Kahn, his lawyer and Lyons declined to comment after the hearing.
Kahn is the third Prophecy official charged over the hedge fund’s collapse. Two other executives, John Hughes and Jeffrey Spotts, have also been charged.
Hughes pleaded guilty and is cooperating with prosecutors. Spotts pleaded not guilty and faces trial next year. The two men and Kahn also have been sued by the SEC over the Prophecy collapse.
Bloomberg News contributed to this report.
Chatty bots are sharing their hot takes through hundreds of thousands of AI-generated podcasts. And the invasion has just begun.
Though their banter can be a bit banal, the AI podcasters’ confidence and research are now arguably better than most people’s.
“We’ve just begun to cross the threshold of voice AI being pretty much indistinguishable from human,” said Alan Cowen, chief executive of Hume AI, a startup specializing in voice technology. “We’re seeing creators use it in all kinds of ways.”
AI can make podcasts sound better and cost less, industry insiders say, but the growing swarm of new competitors entering an already crowded market is disrupting the industry.
Some podcasters are pushing back, requesting restrictions. Others are already cloning their voices and handing over their podcasts to AI bots.
Popular podcast host Steven Bartlett has used an AI clone to launch a new kind of content aimed at the 13 million followers of his podcast “Diary of a CEO.” On YouTube, his clone narrates “100 CEOs With Steven Bartlett,” which adds AI-generated animation to Bartlett’s cloned voice to tell the life stories of entrepreneurs such as Steve Jobs and Richard Branson.
Erica Mandy, the Redondo Beach-based host of the daily news podcast called “The Newsworthy,” let an AI voice fill in for her earlier this year after she lost her voice from laryngitis and her backup host bailed out.
She fed her script into a text-to-speech model and selected a female AI voice from ElevenLabs to speak for her.
“I still recorded the show with my very hoarse voice, but then put the AI voice over that, telling the audience from the very beginning, I’m sick,” Mandy said.
Mandy had previously used ElevenLabs for its voice isolation feature, which uses AI to remove ambient noise from interviews.
Her chatbot host elicited mixed responses from listeners. Some asked if she was OK. One fan said she should never do it again. Most weren’t sure what to think.
“A lot of people were like, ‘That was weird,’” Mandy said.
In podcasting, many listeners feel strong bonds to hosts they listen to regularly. The slow encroachment of AI voices for one-off episodes, canned ad reads, sentence replacement in postproduction or translation into multiple languages has sparked anger as well as curiosity from both creators and consumers of the content.
Augmenting or replacing host reads with AI is perceived by many as a breach of trust and as trivializing the human connection listeners have with hosts, said Megan Lazovick, vice president of Edison Research, a podcast research company.
Jason Saldanha of PRX, a podcast network that represents human creators such as Ezra Klein, said the tsunami of AI podcasts won’t attract premium ad rates.
“Adding more podcasts in a tyranny of choice environment is not great,” he said. “I’m not interested in devaluing premium.”
Still, platforms such as YouTube and Spotify have introduced features for creators to clone their voice and translate their content into multiple languages to increase reach and revenue. A new generation of voice cloning companies, many with operations in California, offers better emotion, tone, pacing and overall voice quality.
Hume AI, which is based in New York but has a big research team in California, raised $50 million last year and has tens of thousands of creators using its software to generate audiobooks, podcasts, films, voice-overs for videos and dialogue generation in video games.
“We focus our platform on being able to edit content so that you can take in postproduction an existing podcast and regenerate a sentence in the same voice, with the same prosody or emotional intonation using instant cloning,” said company CEO Cowen.
Some are using the tech to carpet-bomb the market with content.
Los Angeles podcasting studio Inception Point AI has produced its 200,000 podcast episodes, accounting for 1% of all podcasts published on the internet, according to CEO Jeanine Wright.
The podcasts are so cheap to make that they can focus on tiny topics, like local weather, small sports teams, gardening and other niche subjects.
Instead of a studio searching for a specific “hit” podcast idea, it takes just $1 to produce an episode so that they can be profitable with just 25 people listening.
“That means most of the stuff that we make, we have really an unlimited amount of experimentation and creative freedom for what we want to do,” Wright said.
One of its popular synthetic hosts is Vivian Steele, an AI celebrity gossip columnist with a sassy voice and a sharp tongue. “I am indeed AI-powered — which means I’ve got receipts older than your grandmother’s jewelry box, and a memory sharper than a stiletto heel on marble. No forgetting, no forgiving, and definitely no filter,” the AI discloses itself at the start of the podcast.
“We’ve kind of molded her more towards what the audience wants,” said Katie Brown, chief content officer at Inception Point, who helps design the personalities of the AI podcasters.
Inception Point has built a roster of more than 100 AI personalities whose characteristics, voices and likenesses are crafted for podcast audiences. Its AI hosts include Clare Delish, a cooking guidance expert, and garden enthusiast Nigel Thistledown.
The technology also makes it easy to get podcasts up quickly. Inception has found some success with flash biographies posted promptly in connection to people in the news. It uses AI software to spot a trending personality and create two episodes, complete with promo art and a trailer.
When Charlie Kirk was shot, its AI immediately created two shows called “Charlie Kirk Death” and “Charlie Kirk Manhunt” as a part of the biography series.
“We were able to create all of that content, each with different angles, pulling from different news sources, and we were able to get that content up within an hour,” Wright said.
Speed is key when it comes to breaking news, so its AI podcasts reached the top of some charts.
“Our content was coming up, really dominating the list of what people were searching for,” she said.
Across Apple and Spotify, Inception Point podcasts have now garnered 400,000 subscribers.
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