Hearts at Work
By Jim Tipton
Just How Much is a Billion Dollars Anyway?

     Forbes magazine recently released their annual list of “400 Richest Americans.” On this latest, their 25th anniversary list, to be in last place you needed for the first time to have assets of more than $1.3 billion dollars. Just how much is a billion dollars anyway?
     Some Lakeside residents might remember that hit show in the late fifties, The Millionaire, which in reruns became a bit of a cult classic. Each week the reclusive multi-millionaire John Beresford Tipton would give anonymously (through his associate Michael Anthony) one million dollars to a person or couple of modest means, and by the end of the thirty- minute serial, the new millionaires would discover that there are deeper values than simply money. 
     In the decade or two that followed that show, women, making bar conversation, would say to me, because my last name is Tipton, “Are you related to John Beresford Tipton,” and I would, for the sake of light conversation, lie, “Yes, actually, he was my grandfather.” The woman would usually then say, “Would you give me a million dollars?” Suffering a shortage of wit, I usually then said something like, “I can’t do that, but if you play your cards right, I’ll buy you breakfast in the morning.” 
     Well, what if I could pass out a million dollars at a crack? What if I could walk into a little village in Mexico, for example, meet with the local administration, make sure adequate protections were in place, and then present to the village $1 million dollars? One million dollars to be used for the construction and staffing of schools, a clinic, a cultural center…
     What if I, James Tipton, following in the footsteps of that illustrious but somewhat distant forebear (so distant as to be nonexistent some might say) John Beresford Tipton…what if I had the $1.3 billion dollars that it took to come in last on this year’s Forbes magazine list of 400 Richest Americans. How many little Mexican villages might I benefit, gifting each with $1 million? Not counting any future interest or gain on that $1.3 billion. 
     The math is simple and it comes to this: One-thousand-three-hundred villages. That’s a lot of schools, medical clinics, and cultural centers. That means I could give $1 million to one village each week for the next twenty-five years!  And I’d still have plenty enough to live on. Enough to buy ground Porterhouse for my dog. Enough to pass out Cuban cigars to strangers. Enough to reupholster the seats in my old Chevrolet. That’s what the poorest on the list could do, would do in fact were he simply me or any number of people I know. 
     How about the richest American?  Who is he? Easy to guess: William Gates III. Only 51 years old, Bill Gates, who of course developed Microsoft, comes in at $59 billion. 
Let’s try another approach.  Assume only 5% annual return on that $59 billion. That works out to almost $3 billion a year. Not touching your principal. 
     That amounts to $250 million a month. And so now, not touching your capital, you have the power to gift eight towns and villages each day with $1 million each. For how long?  At 5% a year? Forever! That’s about 3,000 towns and villages each year, towns and villages often in desperate need of schools, clinics, cultural centers. A recent Mexican census (2005) showed 2,640 towns between 2,500 and 15,000 inhabitants, and another 427 between 15,000 and 100,000. What do you do the second year and the third and the fourth? On to Central America and South America? And keep in mind we are simply talking about using the attainable 5% earnings on the assets of one person, William Gates III.
     Carlos Slim, the Mexican billionaire, is now believed to have surpassed Bill Gates, with a current fortune of $68 billion to become the richest man in the world. Many Mexicans feel that back in 1990 President Salinas did a bad job of privatizing the heretofore government-held Telmex. Slim, through “crony capitalism” (strongly endorsed by the first President Bush) not only was able to buy Telmex for a song but was also given a monopoly for six years (his family owns 48% of the capital shares and 71% of the voting shares). Without improving services, Slim, in 1991 raised rates to already struggling Telmex customers by a whopping $247.4%.
     The Economist says “Unlike Bill Gates and Warren Buffet…Slim is the parsimony of philanthropy.” (Hats off to Bill Gates and Warren Buffet for becoming very significant philanthropists.) Think about what Slim could do were he of a mind to help the people of Mexico. Those figures for Gates, based on 5% a year return, would be even higher for Slim. Those 3,000 towns in Mexico, each gifted with $1 million for schools, clinics, cultural centers, even to help create sustainable businesses, would make Slims a national hero, adored for generations. 
     Slim has received favorable press recently for donating $70 million to buy 250,000 laptops for Mexican children.  Put in perspective, though, $70 million, at a modest 5% (and Slim has been doing much better than 5% because of his control of phone services in Mexico), is still only about one week’s worth of income to Slim. And through what service will those 250,000 laptops be connected to the internet with a monthly fee? Telmex.   
     What has skewed our economic systems so badly in favor of the privileged few who with the help of lawyers and politicians and “crony capitalism” continue to gather into their own coffers what is not simply excessive but preposterously—outrageously—excessive accumulation of personal wealth?  “Crony capitalism” is, finally, “phony capitalism.”