Billionaires and Their Private Jets

HAILEY, Idaho — Robert Kraft, the owner of the New England Patriots, flies in a Gulfstream G650. So do Jeff Bezos and Dan Schulman, PayPal’s chief executive. The jets, roughly 470 of which are in operation, retail for about $75 million each.

Most days, those planes are spread out, ferrying captains of industry to meetings around the globe. But for one week in July, some of them converge on a single 100-foot-wide asphalt runway beside the jagged hills of Idaho’s Wood River Valley.

The occasion is the annual Sun Valley conference, a shoulder-rubbing bonanza organized by the secretive investment bank Allen & Company. Known as “summer camp for billionaires,” the conference kicks off this year on Tuesday, and it draws industry titans and their families — some of whom are watched over by local babysitters bound by nondisclosure agreements. In between organized hikes and fly-fishing at past gatherings, there have been sessions on creativity, climate change and immigration reform.

For decades at these secluded gatherings, chief executives and board chairmen have made deals that have shaped the TV we watch, the news we consume and the products we buy. It is where, near the ninth hole of the golf course, the head of General Electric expressed interest in selling NBC to Comcast. It is where Mr. Bezos met with the owner of The Washington Post before agreeing to buy the paper, and where Disney pursued a plan to purchase ABC — with Warren Buffett at the center of the discussions.

It is also the biggest week of the year for Chris Pomeroy, the director of Friedman Memorial Airport and the man responsible for making sure all the moguls come and go smoothly.

In the months before the conference starts, Mr. Pomeroy prepares to play a high-stakes, three-dimensionsional game of Tetris with multimillion-dollar private jets as attendees travel to Sun Valley, a resort town with a year-round population of 1,800.

During a 24-hour period last year as the conference began, more than 300 flights passed through Friedman Memorial Airport in Hailey, a small town near Sun Valley, according to data from Flightradar24, an industry data firm. They ranged from tiny propeller planes to long-wing commercial jets. By comparison, two weeks ago, when Mr. Pomeroy gave me a brief tour of the airport, just 44 flights took off or landed there over 24 hours, according to the data firm.  READ MORE...

Economic Inequality

June 5, 2022





By David Leonhardt

Good morning. We look at why economic inequality began soaring in the U.S. four decades ago.

Jack Welch before his retirement in 2001.Chester Higgins Jr./The New York Times

Net losses
If you look at historical data on the U.S. economy, you often notice that something changed in the late 1970s or early ’80s. Incomes started growing more slowly for most workers, and inequality surged.

David Gelles — a Times reporter who has been interviewing C.E.O.s for years — argues that corporate America helped cause these trends. Specifically, David points to Jack Welch, the leader of General Electric who became the model for many other executives. I spoke to David about these ideas, which are central to his new book on Welch (and to a Times story based on it).

How do you think corporate America has changed since the 1980s in ways that helped cause incomes to grow so slowly?

For decades after World War II, big American companies bent over backward to distribute their profits widely. In General Electric’s 1953 annual report, the company proudly talked about how much it was paying its workers, how its suppliers were benefiting and even how much it paid the government in taxes.

That changed with the ascendance of men like Jack Welch, who took over as chief executive of G.E. in 1981 and ran the company for the next two decades. Under Welch, G.E. unleashed a wave of mass layoffs and factory closures that other companies followed. The trend helped destabilize the American middle class. Profits began flowing not back to workers in the form of higher wages, but to big investors in the form of stock buybacks. And G.E. began doing everything it could to pay as little in taxes as possible.

You make clear that many other C.E.O.s came to see Welch as a model and emulated him. So why wasn’t there already a Jack Welch before Jack Welch, given the wealth and fame that flowed to him as a result of his tenure?

This was one of those moments when an exceptional individual at a critical moment really goes on to shape the world.

Welch was ferociously ambitious and competitive, with a ruthlessness that corporate America just hadn’t seen. In G.E., he had control of a large conglomerate with a history of setting the standards by which other companies operated. And Welch arrived at the moment that there was a reassessment of the role of business underway. The shift in thinking was captured by the economist Milton Friedman, who wrote in The Times Magazine that “the social responsibility of business is to increase its profits.”  

Was Welch’s approach good for corporate profits and bad for workers — or ultimately bad for the company, too? You lean toward the second answer, based on G.E.’s post-Welch struggles. Some other writers point out that many companies have thrived with Welch-like strategies. I’m left wondering whether Welchism is a zero-sum gain for shareholders or bad for everyone.

Welch transformed G.E. from an industrial company with a loyal employee base into a corporation that made much of its money from its finance division and had a much more transactional relationship with its workers. That served him well during his run as C.E.O., and G.E. did become the most valuable company in the world for a time.

But in the long run, that approach doomed G.E. to failure. The company underinvested in research and development, got hooked on buying other companies to fuel its growth, and its finance division was badly exposed when the financial crisis hit. Things began to unravel almost as soon as Welch retired, and G.E. announced last year it would break itself up.

Similar stories played out at dozens of other companies where Welch disciples tried to replicate his playbook, such as Home Depot and Albertsons. So while Welchism can increase profits in the short-term, the long-term consequences are almost always disastrous for workers, investors and the company itself.

Welch was responding to real problems at G.E. and the American economy in the 1970s and early ’80s. If his cure created even bigger problems, what might be a better alternative?

An important first step is rebalancing the distribution of the wealth that our biggest companies create. For the past 40-plus years we’ve been living in this era of shareholder primacy that Friedman and Welch unleashed. Meanwhile, the federal minimum wage remained low and is still just $7.25, and the gap between worker pay and productivity kept growing wider.

There are some tentative signs of change. The labor crisis and pressure from activists has led many companies to increase pay for frontline workers. Some companies, such as PayPal, are handing out stock to everyday employees.

But it’s going to take more than a few magnanimous C.E.O.s to fix these problems. And though I know it’s risky to place our faith in the government these days, there is a role for policy here: finding ways to get companies to pay a living wage, invest in their people and stop this race to the bottom with corporate taxes.

American companies can be competitive and profitable while also taking great care of their workers. They’ve been that way before, and I believe they can be that way again.

More about David Gelles: He was born in New York and got his first full-time job in journalism working for the Financial Times, where he interviewed Bernie Madoff in prison. His book about Welch is called “The Man Who Broke Capitalism.” He recently spoke about the media’s role in celebrating Welchism.

Challenge For China

Hours before Russian President Vladimir Putin announced a military operation in eastern Ukraine, the US accused Moscow and Beijing of combining to create a "profoundly illiberal" world order.

The Ukraine-Russia crisis is posing a major challenge for China on many fronts.

The ever-closer diplomatic relationship between Russia and China could be seen at the Winter Games with Mr Putin coming to Beijing as one of only a handful of known world leaders to attend.

Significantly, Mr Putin waited until just after the Games were over to recognise the two breakaway regions of Ukraine and send in troops to back them.

In its public pronouncements, the Chinese government has urged all sides to de-escalate tensions in Ukraine.


But now that Russia has dispensed with all such restraint, where does that leave China's official position as clashes escalate?

The Chinese government thinks it cannot be seen to support war in Europe but also wants to strengthen military and strategic ties with Moscow.

Ukraine's number one trading partner is China and Beijing would ideally like to maintain good relations with Kyiv but this could be difficult to sustain when it is clearly so closely aligned with the government which is sending its troops into Ukrainian territory.

There is also the potential for trade blowback on China from Western Europe if it is judged to be backing Russia's aggression.

A shift in China's foreign policy?

Furthermore, a constant refrain from China's leaders is that it does not interfere in the internal affairs of others and that other countries should not interfere in its internal affairs.

But last week, in a surprising move, China abstained from a UN Security Council vote condemning the invasion of Ukraine.

Some analysts had expected Beijing to join Russia in voting against the motion, but the fact that it did not has been described as a "win for the west" - and is a sign of Beijing's non-interference.

China however, is still far from condemning the situation, with Foreign Ministry spokesman Wang Wenbin refusing to refer to what is happening there as an "invasion".

There are also unconfirmed reports that Beijing had been aware of the situation and had deliberately turned a blind eye.

According to a New York Times report citing unidentified US officials, the US had over the past months repeatedly urged China to intervene and tell Russia not to invade Ukraine.

However, the report adds that officials later found out that Beijing had shared this information with Moscow, saying the US was trying to sow discord and that China would not try to impede Russian plans.  READ MORE...

The 1619 Project

The 1619 Project is a long-form journalism endeavor developed by Nikole Hannah-Jones, writers from The New York Times, and The New York Times Magazine which "aims to reframe the country's history by placing the consequences of slavery and the contributions of Black Americans at the very center of the United States' national narrative." 

The first publication stemming from the project was in The New York Times Magazine of August 2019 to commemorate the 400th anniversary of the arrival of the first enslaved Africans in the English colony of Virginia. 

These were also the first Africans in mainland British America, though Africans had been in other parts of North America since the 1500s. The project later included a broadsheet article, live events, and a podcast.

The project has sparked criticism and debate among prominent historians and political commentators. In a letter published in The New York Times in December 2019, historians Gordon S. Wood, James M. McPherson, Sean Wilentz, Victoria E. Bynum and James Oakes expressed "strong reservations" about the project and requested factual corrections, accusing the project's creators of putting ideology before historical understanding. 

In response, Jake Silverstein, the editor of The New York Times Magazine, defended its accuracy and declined to issue corrections. In March 2020, The Times issued a "clarification", modifying one of the passages on the role of slavery in the American Revolution that had sparked controversy.

On May 4, 2020, the Pulitzer Prize board announced that they were awarding the 2020 Pulitzer Prize for Commentary to project creator Nikole Hannah-Jones for her introductory essay.

In September 2020, controversy arose over changes that the Times had made in the published text without accompanying editorial notes. Critics, including Bret Stephens of the Times, claimed the differences showed that the newspaper was backing away from some of the initiative's more controversial claims.  SOURCE:  Wikipedia

Enemy of the State

Award-winning filmmaker and historian Ken Burns said Facebook CEO Mark Zuckerberg is "an enemy of the state" who belongs in jail.

Burns joined The New York Times’ "Sway" podcast to promote a new film about Muhammad Ali and was asked if a particular tech figure could be as culturally significant in a few decades as the boxing legend is now.

"I mean, I hope Zuckerberg is in jail by then," Burns said.

"This is an enemy of the state, and I mean the United States of America. He doesn’t give a sh-t about us, the United States," Burns continued. "He knows he can transcend it. He can get away to any place. And so it’s just about filthy lucre, that’s it."

Burns then turned his attention to Facebook COO Sheryl Sandberg.

"Because these people — and Sheryl is a complicit — the Nuremberg of this, is if it ever happens, which it won’t, will be pretty interesting," Burns said. "The way that we’ve been able to temporize and say, ‘Oh, it’s okay, we’ll just go a little bit further,’ right?"

Host Kara Swisher answered, "Yeah," and moved on to the next topic.

Facebook did not immediately respond to a request for comment.  READ MORE