In sixty years, we have gone from 2 billionaires in the United States to just under 2,000. How on earth did that happen?
Today, Timothy Noah from the New Republic takes us all the way from our framers fearing excessive wealth to the country's first (potential) trillionaire. To learn about their proliferation, their desires, and their outsized effect on American policy, check out his article, How the Billionaires Took Over.
Transcript
Nick Capodice: What was your first job that you ever had?
Hannah McCarthy: I was a counselor at the same theater summer camp that I attended as a child.
Nick Capodice: What did you make?
Hannah McCarthy: Uh, probably like $6 an hour. Maybe $6.50.
Nick Capodice: That's not good.
Hannah McCarthy: What was your first job?
Nick Capodice: I was a dishwasher at Hermanos Cocina mexicana. With the firm wage of $4.25 an hour.
Hannah McCarthy: All right. Yeah, [00:00:30] it adds up. You know.
Nick Capodice: I served Steven Tyler nachos once.
Hannah McCarthy: Okay, well, that's your payment.
Nick Capodice: So I calculated how long I'd have to work at Hermanos to make $1 billion.
Hannah McCarthy: It's really not, hermano.
Nick Capodice: No, no, it's it's in New Hampshire. It's hermanos.
Hannah McCarthy: All right. How long?
Nick Capodice: Nonstop. No sleeping. 30,000 years.
Archival: Shareholders [00:01:00] are currently meeting to vote on Musks new pay package. It could be worth nearly $1 trillion in stock.
Archival: Wedding bells are ringing in Venice for billionaire Jeff Bezos and fiance Lauren Sanchez with a smooch on a yacht. Its a modern take on the ancient city's history of power and opulence.
Archival: We make the rules now. The news, war, peace, famine, upheaval, the price of a paperclip. We pick that rabbit out of the hat where everybody sits out there wondering how the [00:01:30] hell we did it. Now, you're not naive enough to think we're living in a democracy, are you, buddy?
Nick Capodice: You're listening to Civics 101. I'm Nick Capodice.
Hannah McCarthy: I'm Hannah McCarthy.
Nick Capodice: And today we are talking about billionaires, how they happen, what they do and how many there are.
Timothy Noah: Yeah. Well, when when when? Uh, I'm 67 years old. And when I was born, there were in the United States. One, maybe two billionaires. [00:02:00]
Nick Capodice: This is Timothy. Noah.
Timothy Noah: My name is Timothy Noah, and I'm a staff writer at The New Republic and also author of the book The Great Divergence, about the rise of income inequality in the 20th century.
Nick Capodice: Now, I reached out to Timothy because he wrote the most in-depth breakdown of the rise of billionaires in America, and I have a link to the full article in the show notes.
Hannah McCarthy: Wait, he said when he was born, there were only two billionaires.
Nick Capodice: Two?
Hannah McCarthy: Who [00:02:30] were they depending on?
Timothy Noah: When you kind of looked at the numbers, there was H.L. hunt, the oil billionaire, and there was John Paul Getty, benefactor of the Getty Museum in Los Angeles. And I think when Getty died in 1976, he was the richest person in the world.
Hannah McCarthy: Okay, well, there are a lot more billionaires these days. I can name about ten right off the top of my head, But how many are we up to now? Like how many billionaires are in the US [00:03:00] now?
Timothy Noah: There's kind of not quite 2000 billionaires in the country. They've been proliferating, uh, especially fast in the last 20 or 30 years as government policy has become more and more friendly to the accumulation and concentration of wealth.
Nick Capodice: So, Hannah, before we get into how we have so many billionaires, I think it's important to just sort of stop for a second and [00:03:30] just think about it and really understand what a billion is. Do you know what a billion is?
Hannah McCarthy: It's a number. It's a one with nine zeros after it. It's a thousand millions.
Nick Capodice: Did you know that in France a billion is a million millions?
Hannah McCarthy: What?
Nick Capodice: Really?
Hannah McCarthy: Uh, it's a number.
Nick Capodice: Different countries have different meanings of the word billion. It was not until World War two that England started [00:04:00] to use billion to mean a thousand millions. And I bring all this up because the reason we're all so slippery on what a billion is, is because it is so gosh darn big.
Timothy Noah: No human being can count to a billion. You would be dead before you got done counting to a billion. You can count to a million if you really want to. I don't recommend it, but you cannot count to a billion.
Hannah McCarthy: How long would it take me to count to a million without sleeping? Sure. [00:04:30]
Nick Capodice: Uh, 11 days.
Hannah McCarthy: All right. What about a billion?
Nick Capodice: Well, 1,000,000,000 seconds ago, Hannah, you were three years old.
Hannah McCarthy: Oh, man.
Timothy Noah: So if you have $1 billion, you literally own more money than any human being will ever be able to count. And that's $1 billion we will probably see in our lifetimes the advent of the first trillionaire. So yes, billion is just an unimaginably large number. Through [00:05:00] its sheer existence, it generates an unbelievable quantity of money and interest.
Nick Capodice: Just for fun, I want to add here that if we do indeed see a trillionaire in our lifetimes, 1,000,000,000,000 seconds ago was 35,000 years ago. Saber toothed tigers prowled the plains. This was when the very first cave paintings were made. And you know what? I'm not going to stop there, Hannah, because I love visualizing large numbers. Let me try this one on you. Do you remember when you held your first $100 [00:05:30] bill?
Hannah McCarthy: I'm still nervous to hold $100 bill. Um, probably not that long ago. Nick, it's basically $1 million.
Nick Capodice: Really? Was the median personal income in the United States is about $45,000 a year. And if we took that whole year's salary and we put it in $100 bills, that is 400 and $5,000 bills right there on the table. Are you with me so far? Yeah. Okay. That stack is about two inches high. It's like a deck of tarot cards, [00:06:00] basically. That tarot deck of cards is a year's salary. Uh, now, if we were to stack a trillion hundred dollar bills, that stack is 670 miles high. Tight stack of $100 bills all the way from New York City to Cincinnati. Well, we are not a weights and measurements podcast where civics podcast. So I'm going to get back to it. Where were we, Hannah?
Hannah McCarthy: There used to be [00:06:30] two billionaires, and now there are just under 2000 billionaires.
Nick Capodice: Right.
Hannah McCarthy: And how did we get to this point?
Nick Capodice: Well, let's go to a time in our country when we didn't have any.
Timothy Noah: The founders were very concerned about this. They were very concerned about the creation of a wealth aristocracy. Thomas Jefferson in particular was very concerned about this, and enacted measures intended to do things like outlaw the [00:07:00] giving of aristocratic titles and going after the entail, which was a, uh, a legal provision intended to preserve family wealth by outlawing the breaking up of large estates. You know, this carried over for, you know, uh, many generations. It was understood that for the United States experiment to work, you could not have an aristocracy of wealth. Louis Brandeis, [00:07:30] I think, went so far as to say, you know, you can have democracy or you can have extreme concentration of wealth, but you can't have both. And we did manage to avoid oligopoly, uh, except in the South, which was an oligopoly from colonial times onward.
Hannah McCarthy: Hang on. Can you explain what an oligopoly is? Is that different from an oligarchy?
Nick Capodice: Absolutely. An oligarchy is a system of government where a small, wealthy, connected group of people have all the power and [00:08:00] make all the decisions. A monopoly, like the game, is when one company controls an entire industry, and an oligopoly is when a small number of companies control an industry.
Hannah McCarthy: And when Timothy says that the South was an oligopoly at the time of our founding, this was because a small number of enslavers had an enormous amount of wealth and power.
Nick Capodice: Yeah, and I think W.E.B. Du Bois put it best in 1935. He wrote, quote, even among the 2 million slaveholders, an oligarchy of 8000 really [00:08:30] ruled the South.
Timothy Noah: But nationally, we did manage to avoid having, um, a strict oligopoly until the end of the 19th century, during the Gilded Age, when so much wealth was concentrated in the hands of the few that, um, it completely corrupted Washington. And Washington was an absolute cesspool of corruption in the, uh, for the last 30 years of the 19th century, [00:09:00] focused particularly on Congress. Members of Congress were were bought and sold.
Hannah McCarthy: And that's the era of the robber barons, right?
Nick Capodice: Yeah.
Hannah McCarthy: Railroad companies flagrantly bribing politicians to get laws passed that benefited them.
Nick Capodice: Yeah. And it wasn't just the rails, Hanna, when Timothy calls it a cesspool of corruption, that is an understatement. There were scandals involving whiskey distillers. There were wealthy people cornering the gold market, uh, even postmasters, the people who sold stamps, making a [00:09:30] fortune through cheating the system. About 4000 people owned 20% of all the wealth in the United States.
Timothy Noah: We had an oligopoly at the end of the 19th century. Then we had the Progressive era, um, which was a reaction against that. Then we reverted to oligopoly in the 1920s. You know, once again, you saw the, the, uh, build up of vast fortunes, even though the United States had enacted an income tax, [00:10:00] the tax policy was tamped down by Republican presidents during the 1920s. So in the 1920s, we got a a dry run for the presidency of Donald Trump in the Treasury secretary, who was Treasury secretary for about a dozen years, Andrew Mellon. Who was not a billionaire, but pretty close and certainly one of the absolute richest [00:10:30] men in the United States. And he kept taxes low. Like Trump, he kept tariffs high. You would think that the advantage of having a very rich man, uh, in power would be that you can avoid financial calamity. This guy's supposed to be smart about money, right? Except he was caught completely unawares by the 1929 stock market crash and had absolutely no idea what to do.
Nick Capodice: So [00:11:00] we had a strong reaction to that. Then after the crash, after the Great Depression, policies were enacted to strengthen unions and to tax the super wealthy at a super high rate. Incomes around the country started to become more equal. But then the pendulum started to swing back in the 1970s.
Timothy Noah: We started in the late 70s, seeing incomes become more unequal. And that trend has continued [00:11:30] to this day. And the end result was the presidency of Donald Trump.
Nick Capodice: Now we are singling President Trump out here because he is indeed our first billionaire president.
Hannah McCarthy: Do we know his net worth?
Nick Capodice: Yeah, we kind of do. It vacillates a lot very quickly. The most recent estimate I could find was about $7 billion. And Donald Trump is not alone when we are talking about the executive branch. The combined wealth of Donald Trump's cabinet is $14 [00:12:00] billion.
Hannah McCarthy: Is that including Elon Musk?
Nick Capodice: I'm not including him. Even though the white House has said that Elon Musk would continue to advise the president after he left his special government employee post in May 2025. If I did include Musk, we would add another $500 billion.
Hannah McCarthy: How does that compare to former cabinets? Did others have far less wealth?
Nick Capodice: Significantly, the people in Joe Biden's cabinet had about $188 million, all told, and President Barack Obama's [00:12:30] was about 2 billion, though most of that was due to one single billionaire, Penny Pritzker, who served as the secretary of Commerce.
Hannah McCarthy: Okay, Nick, so you have told me sort of how the rise of billionaires happened in broad terms, but can we talk about some specifics? What is happening here? What specific laws and policies have made this possible?
Nick Capodice: I'll get into that, as well as the kinds of political power a person has when they happen to have $1 billion right after this break.
Hannah McCarthy: But before that break, a reminder [00:13:00] that we are not billionaires.
Nick Capodice: Do you think any billionaires have ever listened to our show.
Hannah McCarthy: On diamond headphones? I don't understand billionaires at all. Maybe I have no idea.
Nick Capodice: I mean, if they liked it, if you're a billionaire out there and you like our show, you could fund not just us, but pretty much the entirety of public radio in the United States.
Hannah McCarthy: And if you are not a billionaire and still would like to support our show, which, by the way, is what we depend on entirely to keep going, you can make us a gift in any [00:13:30] amount. No aliens at all at our website civics101podcast.org.
Speaker7: Airway. And hey, the auntie made the ice caves. Ronnie say old man d dish and cry. We are three. One day.
Nick Capodice: We're back. We're in the money today on Civics 101 and we're talking about billionaires. [00:14:00]
Hannah McCarthy: All right, so can we talk about how billionaires become billionaires in 2025?
Nick Capodice: The first part of this is something I think everyone knows or understands at a base level, which is that it's a lot easier to make money when you already have money. You can just make money by having it just on the interest alone. And for this, I'd like to use a billionaire we haven't mentioned yet. Jeff Bezos, the founder of Amazon, has $242 billion. [00:14:30] He makes about $9 million an hour. So if we're talking about interest, Hannah, do you know what the percentage rate of return is on? Like a savings account? A typical one you could get from a bank.
Hannah McCarthy: I know that it differs. There are high yield accounts, and then there are, like, standard savings accounts.
Nick Capodice: It's like a really good high yield savings account that's going to have a 5% rate of return. So if Jeff Bezos just had his money in that he would be earning $12 billion a year just by having [00:15:00] it sit there.
Hannah McCarthy: I'm going to guess, though, that Jeff Bezos keeps his money somewhere else. He's getting more than 5%, exponentially more.
Nick Capodice: And this brings me to the second way billionaires make more money. Here again is Timothy Noah.
Timothy Noah: Well, you see it in tax policy. You see it in the difficulty Democrats have had in passing legislation to reverse the anti-labor Taft-Hartley act of 1947, which sharply reduced union power after unions had [00:15:30] gotten very strong starting in the 1930s. And you see it in things like the, you know, the pass through provision in the in the recent, uh, big beautiful reconciliation bill.
Hannah McCarthy: This was the spending bill passed in July of 2025 that, among other things, did not increase tax rates for the wealthy.
Timothy Noah: Yeah, there was a lot of focus on the top rates not going up. And that was significant. But I think [00:16:00] even more significant for the billionaire class was this very complicated pass through provision, which I won't even bother explaining here, but it had great value to the rich.
Hannah McCarthy: But how much value how did it pay off?
Timothy Noah: Well, it paid off in one way. To look at that is to look at the taxation of capital versus labor. Um, it used to be that we taxed capital in the United States more heavily than we taxed labor. And [00:16:30] those lines crossed about 6 or 7 years ago. We now tax labor more than we tax capital.
Nick Capodice: There's a very famous book that came out a few years ago by an economist named Thomas Piketty. The book is titled capital in the 21st century, and central to this book is one equation. R is greater than G.
Hannah McCarthy: R is greater than g.
Nick Capodice: R is greater than G. His name is Robert Paulson. [00:17:00] And because my brain sometimes shorts out when we talk about economics, I had to read what it meant a dozen times, which means that our listeners are going to have to learn about it as well. So, Arianna, R is capital. That is the money that people are making from the money they already have, like the interest we were talking about before. Now G on the other hand, G is labor. You and I go to work, we make a podcast, we get a check every [00:17:30] two weeks, a baker sells a hundred loaves of bread. Apple sells 3 billion iPhones. Whatever it is, the money made from labor, from working. So traditionally, gee, labor was responsible for more wealth in the country than are. But relatively recently, this is no longer the case. And now R is greater than. Gee.
Timothy Noah: Basically, money makes money faster [00:18:00] than people make money. And um, that's a process that is driven by government policy and tax policy.
Hannah McCarthy: So earlier Timothy said that if you are a billionaire, you have more money than you will ever be able to count. What are billionaires spending their money on?
Timothy Noah: How much can can you really spend? How much can a person say, I just want to live like a ridiculous rich [00:18:30] person. You run out of things to buy pretty quickly. It's hard, you know, to spend even as much as $100 million in a year just on stuff for yourself. You know, the mansion, the butler, the private plane. There was a wonderful piece in Yahoo Finance did last year and found that the billionaire lifestyle could be maintained with, I think it was something like 50 or $60 million a year, which [00:19:00] if you're a billionaire, your investments are throwing off at least that much annually. So you reach for, well, what am I going to spend my money on? I can't buy more stuff. All I can do is buy power. So that's what they do. They buy power. And they've been, you know, buying their way into our political system at a rapid clip.
Hannah McCarthy: We've [00:19:30] talked about this a few times on the show how after the Supreme Court's ruling in Citizens United, we have an episode on that case, by the way. You can find it on our website. The super wealthy can spend unlimited funds on campaigns. So it's possible to conceive of, you know, a campaign speech where a candidate is really giving that speech to one person who cares about a handful of things, right? Are most billionaires involved in politics?
Nick Capodice: Many are. The most recent data I read on this was from 2013, which polled the top 1% [00:20:00] of wealthy people in the United States. So 47% of these people reported that they had directly contacted someone in Congress in the last six months. And when asked what it was about, the most common answer was it was about something of, quote, a fairly narrow economic self-interest, end quote. People with money can and do steer policy to make them more money. And I asked Timothy [00:20:30] for an example of this in practice. And he brought up President Trump.
Timothy Noah: There was a fantastic story in The New York Times, uh, a few weeks ago. It was the lead story in the New York Times. Didn't stick somehow, but the United Arab Emirates wanted to buy some AI chips from the United States. And the Biden administration had said, no, you can't have them because you've been doing military exercises with China. Trump comes in and the United Arab Emirates buys $2 [00:21:00] billion worth of world liberty. Financial stablecoins and World Liberty Financial is controlling the bulk of it. At the time, anyway was owned by Donald Trump and the Trump family.
Nick Capodice: Real quick world Liberty Financial is a cryptocurrency company. We have got to do a breakdown on crypto. One of these days, and in brief, Donald Trump owns a lot of it.
Timothy Noah: So the UAE in fact, put $2 billion into the pocket of Donald Trump, and two weeks later, they [00:21:30] were they got the go ahead to get the, um, the AI chips that they wanted.
Archival: By the way, did you know that the Trump family is set to benefit from a $2 billion deal with a foreign government? I did not, but the New York Times broke this story, and this is what the story is.
Nick Capodice: Currently, President Trump alone, not including his family, owns $5 billion worth of World Liberty financial crypto.
Hannah McCarthy: All right, billionaires may be new, but we are talking about an old, old [00:22:00] story here, Nick. From presidents to robber barons to kings to Roman emperors, people with wealth have power and people with power accumulate wealth. Now, for those who might want to change that, is this something that could change?
Nick Capodice: Yeah, that was the last thing I asked, Timothy. Is a change to the system Possible.
Timothy Noah: There's always something that can be done. I mean, this is a this is a status quo that was created by our [00:22:30] political system. And we live in a democracy. And the political system can change. The existence of an oligopoly makes it difficult, but it doesn't make it impossible. I think that the most essential thing to do is to build up union power, because it is the only organized sector that can compete with capital and with conservatives and the status quo. The problem is it's very weak right now. But [00:23:00] it was, you know, it was not weak 60, 70 years ago. And it can be made strong again with passage of legislation to encourage union organizing. I think that's the most important thing. But it's also true that that, uh, you know, we can we can go out and organize. Organized. We can organize communities. We can we can educate people. Uh, the polls show that people really don't like when they're told [00:23:30] about these facts. They don't like them. It is not the oligopoly is not popular in the United States, and therefore a, uh, a skillful marshaling of that outrage can yield political results.