At the moment, Conard is pushing a new book, based on the startlingly tone-deaf premise that super-wealthy people make life better for the rest of us — that having billionaires (about 400 in the US today) tends to keep life nice for the little people.
Unfortunately for Conard, the conclusion he perversely chooses to believe contradicts best practices of wealth management. More on that after some orientation to Conard’s ultra-privileged world.
Conard’s capacity for guile was made abundantly clear after he hid, then later admitted, his role behind a scheme to donate one million dollars to Mitt Romney’s presidential campaign entirely anonymously. Sadly, Corporate America seems to reward manipulators like Edward Conard perhaps because they hoard such secret political power.
However, at this moment, Conard is pushing himself on the public to hawk his new book, “Unintended Consequences: Why Everything You’ve Been Told About the Economy Is Wrong.”
Excuse me if I don’t link to a sales page. The man’s worth hundreds of millions of dollars; he doesn’t need your money. He wants it… but he doesn’t need it.
Think about that for a minute. Who could do more good with that $18.26 (per Amazon): you, and your family, and the places you’d spend it… or a guy who already has $18.26 ten or twenty million times over?
It seems stunningly bad form for Conard to publish this insult to equality while his buddy is trying to pick up the White House. The author seems unaware that Romney’s campaign blanches and reels with every mention of the book. Conard’s opportunistic self-aggrandizement has the “Unintended Consequences” of reminding the public that the Bain Capital environment — which he and Romney co-authored — must have been rather ethics-free.
Bain — in vain, mainly because it is so plain — has sought to distance itself from Conard.
I defer to the Elias Isquith’s eloquent characterization of Conard’s “economics.” Isquith writes: …it’s self-evident crackpot nonsense, gussied up with copious econojargon and delivered with the unbending, serene confidence of the religious zealot.”
The crackpottiest central notion of Conard’s bunch is that having a small number of ultra-wealthy people is beneficial for society. He suggests that these barons know best how to invest. He advises the other 99.999% to say “Thank you” and stay out of the matter.
Few notions could be more misguided, or economically dangerous.
In fact, it is hard work to “use” money (that is, to invest in any sense) effectively. As a rule, very wealthy people find it complex, and often difficult, to find enough truly worthy causes in which to invest.
Over the years, I’ve spoken with millionaires and with billionaires who confirm this conundrum. Whether investing as a capitalist, or as a philanthropist, handing out money can be a challenging full time job.
Some were discussing philanthropy, primarily toward land conservation. What agencies can they trust? Which organization is most efficient? Can they rely on external indicators to reveal where their money really will go?
Imagine giving an organization thousands (or millions) of dollars, only to discover later that the group does something different from what you were led to believe. It’s nightmarish.
Others among these wealthy folks were talking about venture capital, usually for tech startups. A solo VC explained to me that he simply did not have the time to make investments of only, say, $500,000. He had twenty-odd million dollars to invest, but could reasonably study, understand, and track only three or four projects. So, he needed each of his investments to be on the order of two to five million dollars.
His $20M capacity arises out of various raw data, as well. Here are some examples from the philanthropic side.
Gates Foundation has nearly 1,000 employees to manage a $33B endowment. Bill Gates decided that $33M requires one dedicated staff member — given a massive organization to support their effort. As the largest charity in the world, their $33M figure skews rather high.
Pew Foundation runs toward the other extreme, with a $5B endowment and 630 staff. Thus, at Pew, one person can deal with only $8M.
Scanning Wikipedia’s list of largest charities, only a few readily provide data on both staff and endowment. But, they’re remarkably consistent.
Howard Hughes Medical Institute: 825 people endowed by $16.1B = $19M each.
Robert Wood Johnson: 283 employees for $7.5B = $26M for each staff member.
Macarthur Foundation: 182 employees for $4.1B = $22M per employee.
Although they have quite different missions, these groups might agree with a VC that (even with efficiencies of size), $20M still requires the attention of one person. Placing more than $20M under the control of one person is… bad business. It’s inefficient. It’s unreliable. It’s unacceptable.
If Conard wishes to be truly businesslike and efficient, and use wealth responsibly, his best strategy would be to distribute his hundreds of millions to a few dozen people, in $20M chunks.
Otherwise, most of his money will languish beyond his capacity to invest well and wisely. Clearly, he wouldn’t want to punish we the commoners by locking it up that way.
Hmmm… but then, perhaps twenty people — with twenty other sorts of knowledge, and twenty other value systems — would be empowered to improve society. And, Edward Conard would have to share the spotlight with twenty other people. And, he would be reduced to a mere twenty-millionaire himself. That would never do!
To help Mr. Conard avoid such horrifying mediocrity, I propose that Edward reserve two shares for himself, totalling $40M. He can manage one $20M share for the benefit of “the 99%” — and spend the other $20M making himself feel important. It’s Win-Win!
One can only hope that — as Conard presses his vile schmeer into the faces of the 99.999% — the natural human revulsion for his brand of selfishness will keep Mitt Romney among the unemployed for at least another year.