I’m late to highlight an important essay in the New York Review of Books, How to Cover the One Percent, by Michael Massing. It focuses primarily on the 0.1% and describes how they are using philanthropy as Trojan Horse for social engineering. Massing stresses that these efforts to promote personal policy agendas go almost entirely unnoticed, in a striking contrast to how attentive the media is to political donations by the super-rich. Here’s his thesis:
Over the last fifteen years, the number of foundations with a billion dollars or more in assets has doubled, to more than eighty. A significant portion of that money goes to such traditional causes as universities, museums, hospitals, and local charities….
The tax write-offs for such contributions, however, mean that this giving is subsidized by US taxpayers. Every year, an estimated $40 billion is diverted from the public treasury through charitable donations. That makes accountability for them all the more pressing. So does the fact that many of today’s philanthropists are more activist than those in the past. A number are current or former hedge fund managers, private equity executives, and tech entrepreneurs who, having made their fortunes on Wall Street or in Silicon Valley, are now seeking to apply their know-how to social problems. Rather than simply write checks for existing institutions, these “philanthrocapitalists,” as they are often called, aggressively seek to shape their operations.
When donors approach a nonprofit, “they’re more likely to say not ‘How can I help you?’ but ‘Here’s my agenda,’” Nicholas Lemann, the former dean of the Columbia School of Journalism, told me. Mainstream news organizations haven’t caught on to this new activism, he said, adding that most of them are into covering “the ‘giving pledge,’” by which the rich commit to giving away at least half their wealth in their lifetime. David Callahan, the founder and editor of Inside Philanthropy, a website that tracks this world, says that “philanthropy is having as much influence as campaign contributions, but campaign contributions get all the attention. The imbalance is stunning to me.”
Massing uses Inside Philanthropy, which is a lean and mean sit funded by donors, as his window into this topic (he also commends The Chronicle of Philanthropy). He stresses that Inside Philanthropy does an admirable job of cataloguing who among the top wealthy gives to what, but is so resource constrained that it can only selectively undertake real investigations. He describes at length where the gaps in coverage are and what a full-fledged site that tracks big-ticket giving might look like.
What is impressive, as well as disconcerting, is Massing’s catalogue of the these propaganda, um, cognitive capture initiatives. He highlights how David Sirota exposed how ex-Enron hedge fund billionaire and public pension fund opponent John Arnold gave a major gift to PBS to help fund the production of a series ominously called The Pension Peril. The Pando story embarrassed PBS into rescinding the gift and canceling the program. But Massing cites other equally problematic gifts, on topics ranging from Obamacare to marijuana legalization to deficit reduction to the virtues of capitalism, made to a whole range of organizations – establishment think tanks, not for profit media, universities – that serve both as validators and amplifiers.
Massing also stressed the importance of looking not simply at the effects of this giving, but where the money came from in the first place, and how companies like Google are investing heavily in these alternative channels to make self-serving positions by academics and other experts look as if they are independently arrived at, when there is ample reason to suspect otherwise. And he gave a generous shout out to NC:
The whole subject of private equity has been woefully undercovered. Firms like Carlyle, Blackstone, and KKR have been the main force behind the flood of mergers and acquisitions of recent years. News accounts have focused far more on the market effects of these deals than on their implications for employment, the concentration of wealth, and community welfare. Back in 2012, such factors were closely analyzed in connection with Mitt Romney’s work at the private equity company Bain Capital, but since then interest in private equity has waned even as the field has boomed. Naked Capitalism, an influential financial blog, recently ran a long post about how private equity companies “are far more obviously connected to an undue concentration of wealth at the expense of workers and communities” than are CDOs (collaterized debt obligations) and the other finance instruments that once drew such attention. Though the top one percent of the one percent “consists disproportionately of private equity and hedge fund principals,” the blog ruefully lamented, few of its readers seem interested. The same could be said of the press. A website on the nation’s power elite would pay close attention to the reach and impact of both private equity and hedge funds.
I hate to quibble, but the post that Massing mentions, Memo to Readers: If You Want to Beat Big Finance, You Need to Be Able to Take the Fight to Their Terrain, indeed did hector the commentariat for the paucity of comments on private equity articles, when they were getting a lot of interest from journalists and other influencers. The concern was that the low comment count was sending a message of reader apathy and thus was undermining their impact.
But that post got over 300 comments, with many protesting that they were in fact reading these posts but they felt they had nothing to add. And as our CalPERS coverage picked up steam, it became a soap opera for some, as they got to know the players and took interest in what the next twists and turns might be. Indeed, we’ve been told that the path-breaking private equity transparency legislation proposed by a CalPERS board member, California Treasurer John Chiang, was the result of letters and calls from readers.
So our experience is that it is possible to interest a broad audience in the stealthy ways the top 0.1% try to secure their position. But for most media outlets, it requires a more persistent effort than they feel they can support relative to the need to stay on top of breaking news. So Massing is correct to call out this conundrum, and I wish there were a better remedy at hand.